United States General Accounting Office 

GAO Report to the Chairman, Subcommittee 

on Oversight of Government 

Management, the Federal Workforce, and 

the District of Columbia, Committee on 

Governmental Affairs, U.S. Senate 

May 2004 UNFUNDED 

MANDATES 

Analysis of Reform 

Act Coverage 

GAO-04-637 

a
Provision is an enforceable duty on state, local, or tribal governments or the 

private sector, and it is not an UMRA exception. 

Direct cost estimate is feasible.

Provision is contained in authorizing legislation reported by an authorizing committee and 

not added after initial CBO UMRA review. 

Provision is not one of seven UMRA exclusions.

Highlights of GAO-04-637, a report to the 

Chairman, Senate Subcommittee on 

Oversight of Government Management, 

the Federal Workforce, and the District of 

Columbia 

The Unfunded Mandates Reform 

Act of 1995 (UMRA) was enacted to 

address concerns about federal 

statutes and rules that require 

state, local, and tribal governments 

or the private sector to expend 

resources to achieve legislative 

goals. UMRA generates 

information about the nature and 

size of potential federal mandates 

to assist Congress and agency 

decision makers in their 

consideration of proposed 

legislation and rules. However, 

concerns about actual or perceived 

federal mandates continue. To 

provide information and analysis 

regarding UMRA’s implementation, 

GAO was asked to (1) describe the 

applicable procedures, definitions, 

and exclusions under UMRA for 

identifying federal mandates in 

statutes and rules, (2) identify 

statutes and final rules that 

contained federal mandates under 

UMRA, and (3) provide examples 

of statutes and final rules that were 

not identified as federal mandates, 

but that affected parties might 

perceive as “unfunded mandates,” 

and the reasons these statutes and 

rules were not federal mandates 

under UMRA. GAO focused on 

statutes enacted and final rules 

issued in 2001 and 2002 to address 

the second and third objectives. 

May 2004 

UNFUNDED MANDATES 

Analysis of Reform Act Coverage 

UMRA generally requires congressional committees and the Congressional 

Budget Office (CBO) to identify and estimate the costs of federal mandates 

contained in proposed legislation and federal agencies to do so for federal 

mandates contained in their rules. Identification of mandates is a complex 

process with multiple definitions, exclusions, and cost thresholds. Also, 

some legislation and rules may be enacted or issued via procedures that do 

not trigger UMRA reviews. 

In 2001 and 2002, 5 of 377 statutes enacted and 9 of 122 major or 

economically significant final rules issued were identified as containing 

federal mandates at or above UMRA’s thresholds. Of the other federal 

actions in those 2 years, at least 43 statutes and 65 rules contained new 

requirements on nonfederal parties that might be perceived as “unfunded 

mandates.” For 24 of those statutes and 26 of those rules, CBO or federal 

agencies had determined that the estimated direct costs or expenditures 

would not meet or exceed applicable thresholds. For the remaining 

examples of statues, most often UMRA did not require a CBO review prior to 

their enactment. The remaining rules most often did not trigger UMRA 

because they were issued by independent regulatory agencies. Despite the 

determinations made under UMRA, some statutes and rules not triggering 

UMRA’s thresholds appeared to have potential financial impacts on affected 

nonfederal parties similar to those of the actions that were identified as 

containing mandates at or above the act’s thresholds. 

Proposed Legislation Must Pass Multiple Steps to Be Identified as Containing Federal 

Mandates at or Above UMRA’s Cost Thresholds 

Provision is contained in authorizing legislation reported by an authorizing committee and 

not added after initial CBO UMRA review. 

Automatic CBO Review 

Provision is not one of seven UMRA exclusions. 

Provision is an enforceable duty on state, local, or tribal governments or the 

private sector, and it is not an UMRA exception. 

Direct cost estimate is feasible. 

www.gao.gov/cgi-bin/getrpt?GAO-04-637. Source: GAO. 

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Patricia A. 

Dalton at (202) 512-6806 or 

daltonp@gao.gov. 

Direct cost estimate for all provisions in legislation meets or 

exceeds threshold. 
Contents 

Letter 1 

Results in Brief 3 

Background 6 

Scope and Methodology 8 

Identification of Federal Mandates in Statutes under Title I 10 

Identification of Federal Mandates in Rules under Title II 25 

Conclusions 36 

Appendixes 

Appendix I: Objectives, Scope, and Methodology 38 

Appendix II: Examples of Statutes with Impacts on Nonfederal Parties 

that Were Not Mandates at or Above UMRA Thresholds 42 

Appendix III: Final Rules with Federal Mandates under UMRA 54 

Appendix IV: Reasons that Selected Final Rules Did Not Trigger UMRA 58 

Appendix V: Examples of Final Rules that Did Not Trigger UMRA But Had 

Potentially Significant Financial Effects on Nonfederal 

Parties 80 

Tables Table 1: 

Table 2: 

Table 3: 

Table 4: 

Table 5: 

Table 6: 

Table 7: 

Legislation Enacted in 2001 and 2002 that CBO Identified 

as Containing Federal Mandates Under UMRA 17 

Laws Enacted in 2001 and 2002 that CBO Identified as 

Containing Federal Mandates Meeting or Exceeding 

UMRA’s Cost Threshold 18 

Selected Examples of Statutes with Potentially Significant 

Impacts on Nonfederal Parties 22 

Selected Examples of Final Rules with Significant Impacts 

on Nonfederal Parties that Did Not Trigger UMRA 34 

Examples of Statutes with Impacts on Nonfederal Parties 

that Were Not Identified as Federal Mandates at or above 

Applicable Cost Thresholds 42 

Final Rules Published in 2001 and 2002 that Agencies 

Identified as Containing Federal Mandates Under 

UMRA 54 

Reasons 65 Final Rules with Significant Effects on 

Nonfederal Parties Did Not Trigger UMRA 60 

Page i GAO-04-637 Unfunded Mandates 
Contents 

Table 8: Examples of Final Rules Published in 2001 and 2002 with 

Provisions that Affected State, Local, and Tribal 

Governments or the Private Sector But Did Not Trigger 

UMRA 

Figures Figure 1: 

Figure 2: 

Figure 3: 

Figure 4: 

Figure 5: 

A Multistep Process Has to Be Followed for CBO to 

Identify Federal Mandates in Proposed Legislation 11 

How Certain Examples of Laws with Impacts on 

Nonfederal Parties Were Treated Under UMRA 21 

Few Final Rules Published in 2001 and 2002 Contained 

Federal Mandates Under UMRA 29 

Agencies’ Reasons for Determining that Their Rules Did 

Not Trigger UMRA’s Requirements 31 

Reasons that Agencies Could Have Claimed for Their 

Rules Not Triggering UMRA 32 

Page ii GAO-04-637 Unfunded Mandates 

80 
Contents 

Abbreviations 

CBO Congressional Budget Office 

DOD Department of Defense 

DOJ Department of Justice 

DOL Department of Labor 

DOT Department of Transportation 

EPA Environmental Protection Agency 

FCC Federal Communications Commission 

FEMA Federal Emergency Management Agency 

GSA General Services Administration 

HHS Department of Health and Human Services 

JCT Joint Committee on Taxation 

NASA National Aeronautics and Space Administration 

NCSL National Conference of State Legislatures 

NRC Nuclear Regulatory Commission 

OIRA Office of Information and Regulatory Affairs 

OMB Office of Management and Budget 

PCAOB Public Company Accounting Oversight Board 

RISC Regulatory Information Service Center 

SEC Securities and Exchange Commission 

TSA Transportation Security Administration 

UMRA Unfunded Mandates Reform Act of 1995 

USDA United States Department of Agriculture 

VA Department of Veterans Affairs 

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Page iii GAO-04-637 Unfunded Mandates 
Page 1 GAO-04-637 Unfunded Mandates 

A

United States General Accounting Office 

Washington, D.C. 20548 

May 12, 2004 

The Honorable George V. Voinovich 

Chairman 

Subcommittee on Oversight of Government Management, 

the Federal Workforce, and the District of Columbia 

Committee on Governmental Affairs 

United States Senate 

Dear Mr. Chairman, 

The Unfunded Mandates Reform Act of 1995 (UMRA) was enacted to 

address concerns expressed by state and local governments about federal 

statutes and regulations that require these nonfederal parties to expend 

resources to achieve legislative goals without being provided federal 

funding to cover the costs.1 Although UMRA was intended to “curb the 

practice of imposing unfunded Federal mandates,”2 the act does not 

prevent Congress or federal agencies from doing so.3 Rather, UMRA 

generates information about the nature and size of potential federal 

mandates on other levels of government and the private sector to assist 

Congress and agency decision makers in their consideration of proposed 

legislation and regulations. UMRA requires congressional committees and 

the Congressional Budget Office (CBO) to identify and provide information 

on potential federal mandates in certain legislation and federal agencies to 

identify the costs and benefits of federal mandates contained in certain 

regulations. 

Concerns about actual or perceived federal mandates continue. In the fall 

of 2003, for example, the presence of an intergovernmental mandate as 

defined by UMRA was one of the issues raised by senators opposing the 

Internet Tax Nondiscrimination Act (S. 150).4 The proposed legislation 

1

Pub. L. No. 104-4, 2 U.S.C. §§658-658g, 1501-71. 

2

Pub. L. No. 104-4 pmbl. 

3

Although UMRA defines a federal mandate, it includes no specific definition of an unfunded 

mandate. Therefore, as in the act, we generally refer to the identification of federal 

mandates, rather than unfunded mandates, in this report. 

4 The Senate passed an amended version of this legislation in April 2004. The House passed 

a related version of this legislation, H.R. 49, in September 2003. 

Page 1 GAO-04-637 Unfunded Mandates 
would have permanently extended and expanded a federal moratorium 

prohibiting state and local governments from levying new taxes on Internet 

access and electronic commerce and also eliminated the “grandfather” 

protection for existing access taxes granted under the previous statutory 

moratorium, which expired November 1, 2003.5 Pursuant to UMRA, CBO 

estimated that repealing the grandfather clause would result in revenue 

losses for as many as 10 states and several local governments totaling from 

$80 million to $120 million annually, beginning in 2007, and that a change in 

the definition of Internet access under the legislation could result in 

additional substantial revenue losses for states and local governments. In 

recent months, criticisms of the No Child Left Behind Act of 2001 because 

of perceived “unfunded mandate” implications have also received 

increasing attention.6 No Child Left Behind contains a number of new or 

expanded requirements, such as the design and implementation of 

statewide achievement tests, imposed upon states and local educational 

agencies that receive federal assistance. 

You asked us to provide information and analysis regarding UMRA’s 

implementation and identify options for refining the act. As agreed with 

your staff, this report addresses the first portion of that request, in which 

you asked us to describe and provide examples of how federal statutes and 

rules with potentially significant financial implications for state, local, and 

tribal governments or the private sector may be enacted or issued without 

being identified as federal mandates under UMRA.7 Specifically, you asked 

us to: (1) describe the applicable procedures, definitions, and exclusions 

for identifying federal mandates in statues and rules under UMRA, 

(2) identify statutes and final rules that contained federal mandates under 

UMRA, and (3) provide examples of statutes and final rules that were not 

identified as federal mandates, but that affected parties might perceive as 

“unfunded mandates,” and the reasons these statutes and rules were not 

federal mandates under UMRA. In the body of this report, we address the 

three objectives separately for title I, which covers the legislative process, 

and title II, which covers the regulatory process. 

5

Pub. L. No. 105-277. 

6

Pub. L. No. 107-110. 

7

We are continuing our work on the other parts of the request, to be reported separately. 

Page 2 GAO-04-637 Unfunded Mandates 
We reviewed UMRA and related guidance documents, analyses, and reports 

on the act’s implementation, interviewed persons knowledgeable about the 

implementation of UMRA in OMB, CBO, and other congressional offices, 

and examined and analyzed sets of statutes and final rules. As agreed with 

your staff, we focused on statues enacted and final rules published during 

2001 and 2002. We conducted our review from August 2003 through 

February 2004 in Washington, D.C., in accordance with generally accepted 

government auditing standards. We have not previously reported on the 

implementation of title I. We reported on the implementation of title II in 

February 1998, concluding that UMRA appeared to have had a limited 

direct impact on agencies’ rulemaking actions.8 

Results in Brief The identification and analysis of federal mandates on state, local, and 

tribal governments or the private sector is a complex process under UMRA. 

Proposed legislation and regulations must pass through multiple steps and 

meet multiple conditions before being identified as containing mandates at 

or above UMRA’s thresholds, and there are some important differences in 

the provisions regarding legislation compared to those for regulations. For 

example, under title I of the act, CBO prepares mandate statements 

identifying and estimating the costs of mandates in legislation that meets 

certain criteria, whether or not those estimated costs meet or exceed 

UMRA’s thresholds ($50 million for intergovernmental and $100 million for 

private sector mandates, in any of the first 5 fiscal years the mandate would 

be effective).

9 Under title II, however, federal agencies are only required to 

prepare mandate statements for regulations containing intergovernmental 

or private sector mandates that would result in expenditures of $100 

million or more in any year. Also, for proposed legislation a point of order 

can be raised on the floor of the House or Senate against consideration of 

any UMRA-covered mandate that lacks a CBO estimate or any unfunded 

intergovernmental mandate exceeding UMRA’s threshold. 

For both legislation and regulations, there are two general ways that 

provisions would not be identified as federal mandates at or above UMRA’s 

thresholds. First, some legislation and regulations may be enacted or 

issued via procedures that do not trigger UMRA reviews by CBO or 

8

U.S. General Accounting Office, Unfunded Mandates: Reform Act Has Had Little Effect on 

Agencies’ Rulemaking Actions, GAO/GGD-98-30 (Washington, D.C.: Feb. 4, 1998). 

9

The dollar thresholds in UMRA are in 1996 dollars and are adjusted annually for inflation. 

Page 3 GAO-04-637 Unfunded Mandates 
agencies. For example, UMRA does not require CBO to review potential 

mandates in appropriations bills, and UMRA does not apply to final rules 

that agencies issue without having published a notice of proposed 

rulemaking or to any rules issued by independent regulatory agencies. 

Second, even if the statute or rule is reviewed, UMRA limits the 

identification of federal mandates through multiple definitions, exclusions, 

and costs thresholds. For example, if the requirements on nonfederal 

parties arise from participation in a voluntary federal program or are a 

condition of federal financial assistance, as was the case with No Child Left 

Behind, those requirements are not considered federal mandates under 

UMRA. 

In 2001 and 2002, 5 of 377 statutes enacted and 9 of 122 major or 

economically significant final rules issued were identified as containing 

federal mandates at or above UMRA’s thresholds. All 5 statutes and 9 rules 

contained private sector mandates as defined by UMRA. One final rule—an 

Environmental Protection Agency (EPA) standard on arsenic in drinking 

water—also contained an intergovernmental mandate. At least with regard 

to legislation, CBO reports and testimonial evidence indicated that the 

existence of UMRA might hinder the introduction of intergovernmental 

mandates or lead lawmakers to reduce the costs of some of those mandates 

before enactment. 

Of the other federal actions in those years, at least 43 statutes and 65 rules 

resulted in new costs or other negative financial impacts on nonfederal 

parties that might be perceived by those parties to have “unfunded 

mandates” implications. We analyzed each of these examples to identify 

how they were treated under UMRA’s mandate identification process. For 

24 of the statutes and 26 of the rules, CBO or federal agencies had 

determined that the estimated direct costs or expenditures, as defined by 

UMRA, would not meet or exceed the applicable thresholds. For the 

remaining examples of statutes, most often UMRA did not require a CBO 

review prior to their enactment. The remaining rules most often did not 

trigger UMRA because they were issued by independent regulatory 

agencies not covered by the act. 

Page 4 GAO-04-637 Unfunded Mandates 
Despite the determinations made under UMRA, some of the statutes and 

rules that had not triggered UMRA’s requirements appeared to have 

potential financial impacts on affected nonfederal parties similar to those 

of actions that had been flagged as containing federal mandates at or above 

the thresholds. Examples in the intergovernmental area included the 

Economic Growth and Tax Relief Reconciliation Act of 200110 and No Child 

Left Behind, both of which did not meet UMRA’s definition of a mandate. 

Among other examples, the Sarbanes-Oxley Act of 2002 was not identified 

as containing a federal mandate at or above the UMRA threshold because 

total costs were uncertain.

11 However, the direct costs of one provision 

were estimated at $80 million annually, while the costs of other provisions 

could not be estimated. The Department of Commerce estimated that a 

rule restricting fishing off Alaska to protect sea lions could reduce industry 

gross revenues by $225 million to $401 million per year. However, the rule 

did not trigger UMRA’s requirements because it did not require 

expenditures of $100 million or more in any year and there was no notice of 

proposed rulemaking. 

This report provides descriptive information and analysis regarding 

UMRA’s implementation, focusing specifically on the coverage and 

identification of federal mandates under UMRA. We are making no specific 

recommendations for executive action nor identifying any specific matters 

for consideration by Congress at this time. As requested, we will be 

continuing our work on other aspects of UMRA. 

On April 22, 2004, we provided a draft of this report to the Director of the 

Office of Management and Budget (OMB) for his review and comment. On 

April 29, 2004, an OMB representative notified us that OMB had no 

comments on our report. 

10Pub. L. No. 107-16. 

11Pub. L. No. 107-204. 

Page 5 GAO-04-637 Unfunded Mandates 
Background Many federal statutes, and the regulations that implement them, impose 

requirements on state, local, and tribal governments or private sector 

parties in order to achieve certain legislative goals. Such statutes and their 

regulations can provide substantial benefits, as well as imposing costs. 

OMB’s 2003 final report on the costs and benefits of federal regulations 

estimated that the total annual quantified benefits of major rules issued 

from October 1, 1992, to September 30, 2002, ranged from $146 billion to 

$230 billion, while the total annual quantified costs ranged from $36 billion 

to $42 billion.

12 

Title I of UMRA focuses on the legislative process, and title II focuses on 

the regulatory process. For both legislation and regulations, UMRA was 

intended to provide more information on and prompt more careful 

consideration of the costs and benefits of federal mandates that affect 

nonfederal parties. UMRA generally defines a federal mandate as any 

provision in legislation, statute, or regulation that would impose an 

enforceable duty on state, local, or tribal governments or the private sector 

or that would reduce or eliminate the amount of funding authorized to 

cover the costs of existing mandates. However, as discussed in the body of 

this report, some other definitions, exclusions, and thresholds in the act 

vary according to whether the mandate is in legislation or a rule and 

whether a provision imposes an intergovernmental or private sector 

mandate. 

If legislation or a rule contains a federal mandate, as defined by UMRA, a 

major consequence is that other requirements in the act are triggered. 

Under title I, when a committee of authorization of the Senate or the House 

of Representatives reports a bill or joint resolution that contains any 

federal mandates to the full legislative body, the committee is required to 

provide the bill or resolution to the Director of CBO and identify the 

mandates it contains. UMRA then requires CBO to analyze each of these 

bills and resolutions—and, on request, other legislative proposals—for the 

presence of such mandates and to estimate their associated costs. CBO 

prepares UMRA statements that are to be included in the authorizing 

committees’ reports. The CBO mandate statements must also include an 

12Office of Management and Budget, Office of Information and Regulatory Affairs, 

Informing Regulatory Decisions: 2003 Report to Congress on the Costs and Benefits of 

Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities 

(Washington, D.C.: 2003). 

Page 6 GAO-04-637 Unfunded Mandates 
assessment of whether the legislation authorizes or otherwise provides 

funding to cover the costs of any new federal mandates. 

UMRA’s specific enforcement mechanism for the requirements of title I is a 

point of order, which a member of Congress may raise to indicate that a 

rule of procedure has been or will be violated.13 Generally, a point of order 

is available under UMRA if there is no CBO UMRA statement for the 

legislation or if the legislation contains an unfunded intergovernmental 

mandate with costs over UMRA’s threshold or if it was not feasible to 

estimate the costs of the intergovernmental mandate. However, points of 

order are not available under UMRA for private sector mandates that 

exceed the cost threshold or if the private sector mandates’ costs are not 

feasible to estimate.

14 UMRA’s rules are not self-enforcing and a point of 

order must be actively raised to hinder the passage of unfunded federal 

mandates. Specifically raising an UMRA point of order may serve to 

heighten the profile of “unfunded mandate” implications in the challenged 

legislation. As of March 2004, 13 points of order had been raised in the 

House of Representatives and no points of order had been raised in the 

Senate under UMRA. Only 1 of these 13, regarding the minimum wage in 

the Contract with America Advancement Act in 1996, resulted in the House 

voting to reject consideration of a proposed provision. 

For rules that contain federal mandates, title II of UMRA requires the 

agencies to prepare written statements containing specific descriptions 

and estimates, including a qualitative and quantitative assessment of the 

anticipated costs and benefits of the mandate. For such rules, agencies are 

to “identify and consider a reasonable number of regulatory alternatives 

and from those alternatives select the least costly, most cost-effective, or 

least burdensome alternative that achieves the objectives of the rule” or 

explain why that alternative was not selected.15 UMRA requires OMB to 

13The point of order is a parliamentary term used in committee or on the floor of either 

chamber of Congress to object to an alleged violation of a rule and to demand that the chair 

enforce the rule. When raised in the House of Representatives, the point of order is voted on 

by the full House. When raised in the Senate, the Presiding Officer makes an initial ruling on 

an UMRA point of order, but the ruling can be appealed to the full Senate and overruled by a 

simple majority. If a point of order is sustained against a measure, amendment, or motion, it 

may not be considered; if sustained against a provision in a measure, the provision is 

immediately deleted. 

14 See 2 U.S.C. §658d of UMRA for more specific information on the availability of a point of 

order. 

152 U.S.C. §1535. 

Page 7 GAO-04-637 Unfunded Mandates 
collect the written statements prepared by the agencies on federal 

mandates in rules and periodically forward them to CBO. UMRA also 

requires OMB to submit annual reports to Congress detailing agencies’ 

compliance with title II. OMB’s Office of Information and Regulatory 

Affairs (OIRA) has the primary responsibility for monitoring agencies’ 

compliance with this title. 

CBO and OMB regularly produce reports on, respectively, activities under 

titles I and II of UMRA.

16 CBO has prepared an annual report on its 

activities under title I each year since UMRA’s enactment. Included in these 

reports is information on two requirements placed on CBO by title I, 

identifying (1) proposed legislation that would have imposed federal 

mandates on another level of government or the private sector and (2) the 

subset of the legislation examined by CBO that was found to contain 

mandates with costs at or above the relevant thresholds. Although not 

required by UMRA to do so, CBO also reviews all statutes enacted to 

identify mandates enacted into law for its annual reports. Since 2001, OMB 

has fulfilled its requirement to report to Congress on compliance with title 

II in the same document used to fulfill a statutory requirement for reporting 

to Congress on the costs and benefits of federal regulations. OMB’s reports 

provide information on the rules that agencies have identified as containing 

federal mandates and also discuss agencies’ efforts to consult with state, 

local, and tribal governments in the development of significant rules. 

Scope and 

Methodology 

To describe the applicable procedures, definitions, and exclusions for 

identifying federal mandates in statues and rules under UMRA, we 

reviewed the act, other related guidance documents, and CBO and OMB 

reports on the implementation of UMRA. We also interviewed persons 

knowledgeable about the implementation of UMRA in OMB, CBO, and 

other congressional offices. To identify statutes and final rules that were 

and were not identified as containing federal mandates under UMRA and 

analyze the reasons for those determinations, we focused our review on 

statutes enacted and final rules published during 2001 and 2002, as agreed 

with your staff. 

16Title III of UMRA included requirements for the Advisory Commission on 

Intergovernmental Relations (ACIR) to report on various issues related to federal mandates, 

but Congress terminated funding for the commission in 1996. 

Page 8 GAO-04-637 Unfunded Mandates 
For our review and analysis of the implementation of title I, we relied on 

information provided to us by the CBO officials responsible for preparing 

UMRA statements on proposed legislation and the annual CBO reports on 

UMRA. At our request, CBO identified from that 2-year period the 5 

statutes that contained federal mandates at or above UMRA’s cost 

thresholds and 43 examples of statutes that were not so identified but 

nevertheless contained provisions having impacts on nonfederal parties. 

We did not ask CBO to compile a comprehensive list of all statutes in those 

years that might have impacts on nonfederal parties. For our review and 

analysis of the implementation of title II, we reviewed all 122 major and/or 

economically significant final rules—generally, those that would have an 

annual effect on the economy of $100 million or more or raise other 

significant economic or policy issues—that federal agencies issued during 

2001 and 2002. Parallel to the information on statutes provided by CBO, we 

focused on identifying two sets of final rules—those that were identified as 

containing federal mandates at or above UMRA’s threshold and those that 

were not but included provisions affecting nonfederal parties that might be 

perceived by those parties as potential “unfunded mandates.” To determine 

whether the statutes and final rules we examined were perceived by 

affected parties as potentially having “unfunded mandate” implications, we 

shared them with the following national organizations representing 

nonfederal levels of government: National Association of Counties, 

National Conference of State Legislatures (NCSL), National Governors 

Association, the National League of Cities, and the U.S. Conference of 

Mayors.

17 We then analyzed the statutes and rules to identify how they had 

been treated under UMRA, in particular identifying the application of 

procedural, definitional, and other provisions of UMRA that guide the 

identification of federal mandates. 

The scope of our review was limited to a 2-year period and, within that 

period, only to examples of legislation enacted and rules that were finalized 

(i.e., we did not include all legislation considered by Congress or rules that 

were proposed but not finalized). Therefore, the examples we reviewed 

might not illustrate all possible ways that a statute or rule with a perceived 

mandate could be enacted or issued without being identified as a federal 

mandate under UMRA. However, the representatives from external public 

sector organizations who reviewed the statutes and rules we examined 

generally concurred that they were perceived as potential “unfunded 

17We also shared our lists with organizations representing the private sector, but received no 

formal responses from them. 

Page 9 GAO-04-637 Unfunded Mandates 
mandates” and that we did not exclude any major examples that they 

believed should have been included. It is also important to recognize that 

perceived “unfunded mandates” could result from nonstatutory, 

nonregulatory federal actions, such as Homeland Security threat level 

adjustments, which are not covered by UMRA and therefore were outside 

the scope of our specific objectives. (See app. I for a more detailed 

description of our objectives, scope, and methodology.) 

Identification of 

Federal Mandates in 

Statutes under Title I 

Statutory provisions that impose requirements on nonfederal parties might 

not be identified as federal mandates under UMRA because some 

legislative actions do not trigger a review and even if the provisions are 

subject to review, UMRA circumscribes the definition of a federal mandate. 

When legislation containing “mandates” does undergo UMRA’s formal 

scrutiny, it has to meet three definitional requirements, not fall into any of 

seven exclusions, and impose costs at or above certain thresholds to be 

identified as containing federal mandates exceeding the cost thresholds 

under UMRA. In 2001 and 2002, 5 of the 377 statutes enacted were 

identified as containing provisions that were federal mandates exceeding 

the thresholds. From the remaining statutes, CBO identified 43 examples 

that had some kind of impact on nonfederal parties but were not identified 

during the legislative process as containing federal mandates at or above 

UMRA’s thresholds. For 24 of those examples, this was because their 

estimated direct costs were below the thresholds. There is some evidence 

that the existence of UMRA served to hinder the introduction of 

intergovernmental mandates, or led to their modification before enactment 

in the past. There is also evidence that suggests that some of CBO’s cost 

estimates under UMRA may have led lawmakers to reduce the cost of some 

mandates before enactment. 

Legislation Must Undergo a 

Multistep Process to Be 

Identified as Containing 

Federal Mandates at or 

Above Applicable Cost 

Thresholds 

The type of legislation that a provision is contained in and how the 

legislation is considered determines if it is subject to automatic review by 

CBO. If provisions are subject to automatic CBO review, they are analyzed 

based on UMRA’s definitional requirements and exclusions. The feasibility 

of developing a cost estimate and the level of the cost estimate is then 

compared to applicable thresholds. Figure 1 depicts this general sequence 

of conditions that must be met before a statutory provision would be 

identified as a federal mandate at or above UMRA’s cost thresholds. 

Page 10 GAO-04-637 Unfunded Mandates 
Yes

Figure 1: A Multistep Process Has to Be Followed for CBO to Identify Federal Mandates in Proposed Legislation 

Is cost estimate feasible? CBO conducts direct cost estimate

Cost estimate Yes No

Not subject to automatic CBO 

review 

Is provision contained in authorizing Subject to automatic CBO review

legislation reported by an authorizing 

committee and not added after initial 

CBO UMRA review? 

Procedures Yes No

Automatic CBO Review 

CBO issues UMRA statement stating 

reason for exclusion and does not 

make any statement regarding mandates 

Is provision not excluded? CBO analyzes provision based on UMRA’s definition 

Exclusions Yes No 

Is provision not excluded? 

Exclusions Yes

CBO issues UMRA statement specifying 

type of federal mandate contained in the 

bill and that costs cannot be estimated 

or are uncertain 

Definition Yes No 

Is provision an enforceable duty on state, 

local, or tribal governments or the private 

sector, and is it not subject to exceptions? 

CBO specifies type of mandate contained in the 

legislation 

CBO issues UMRA statement stating 

legislation does not contain a mandate 

under UMRA 

Cost threshold Yes No 

Does direct cost estimate for all 

provisions in legislation meet or exceed 

thresholds? 

CBO issues UMRA statement 

specifying type of federal mandate 

contained in the legislation and 

that it meets or exceeds the 

applicable cost threshold 

CBO issues UMRA statement specifying 

type of federal mandate contained in the 

legislation and that it is below the 

applicable cost threshold 

Source: GAO. 

The following sections discuss these procedures, exclusions, definitions, 

and cost thresholds in more detail. 

UMRA Procedures Do Not Provisions that are (1) not contained in authorizing bills, or (2) not 

Require All Legislative reported by an authorizing committee are not automatically subject to CBO 

Provisions to Be Automatically review before going to the floor (see fig. 1), and thus a CBO UMRA 

Reviewed by CBO statement may not be issued. For example, appropriations bills are not 

automatically subject to CBO review under UMRA. In addition, even if a 

provision is contained in an authorizing bill, it still must be “reported” by 

that committee—as opposed to going directly to the full House or Senate or 

Page 11 GAO-04-637 Unfunded Mandates 
“discharged” by the committee without a vote to send it to the full House or 

Senate—to be subject to automatic CBO review. 

CBO was not required to review seven bills that contained federal 

mandates during 2001 and 2002 that ultimately became law because they 

either were appropriations bills or were authorizing bills not reported by 

authorizing committees. For example, a provision prohibiting states from 

issuing a permit or lease for certain oil and gas drilling in the Great Lakes 

was not reviewed by CBO prior to enactment because it was contained in 

the Energy and Water Development Appropriations Act of 2002.18 

Although UMRA does not require an automatic CBO review of provisions 

not contained in authorizing bills or bills not reported by authorizing 

committees, CBO told us that it initiates an informal review of provisions in 

appropriations bills and the results of these informal reviews are 

communicated to appropriations committee clerks when CBO finds 

potential mandates in these bills. During these informal reviews, CBO does 

not estimate costs unless CBO already has cost data from an earlier review 

or unless Congress requests it. CBO will also review any legislation on 

request. 

UMRA does not require automatic CBO review of provisions added after 

CBO’s initial review. Amendments containing mandates may be added to 

legislation after CBO issues its statement about whether the legislation 

contains any federal mandates. UMRA states, however, that “the 

committee of conference shall insure to the greatest extent practicable” 

that CBO prepare statements on amendments offered subsequent to its 

initial review that contain federal mandates.

19 According to CBO’s annual 

report for 2002, three laws were enacted in 2002 that contained federal 

mandates not reviewed by CBO prior to enactment because they were 

added after CBO reviewed the legislation. For example, a provision 

requiring insurers of commercial property to offer terrorism insurance was 

added to the Terrorism Risk Insurance Act of 2002 after CBO’s UMRA 

review, and thus not identified as a private sector mandate under UMRA 

prior to enactment.20 

18 Pub. L. No. 107-66. 

192 U.S.C. §658c(d). 

20Pub. L. No. 107-297. 

Page 12 GAO-04-637 Unfunded Mandates 
There is one other important caveat regarding legislative provisions for 

which a CBO UMRA review is not required. The Joint Committee on 

Taxation (JCT), rather than CBO, has jurisdiction over proposed tax 

legislation and produces revenue estimates for all such legislation 

considered by either the House or the Senate. In addition, JCT examines 

legislative provisions that affect the tax code for federal mandates and 

estimates their costs. According to a JCT legislative counsel, a statement 

regarding the existence of federal mandates should be included in the 

House or Senate committee report. Also, according to CBO, JCT estimates 

of revenue impacts are included in CBO cost estimates for legislation. 

When Provisions Are Reviewed, A provision must meet the formal definition of a mandate and not be not be 

They Are Subject to Many classified as an “exception” to be identified as a federal mandate. UMRA 

Definitional Requirements and defines a federal mandate as a provision that would impose an enforceable 

Exclusions duty upon state, local, or tribal governments (intergovernmental mandate) 

or upon the private sector (private sector mandate). Exceptions are 

defined as enforceable duties that are conditions of federal financial 

assistance or arise from participation in a voluntary federal program. 

UMRA does include as intergovernmental mandates certain conditions on 

federal assistance programs and reductions in the authorization of 

appropriations for federal financial assistance and the control of borders 

under certain conditions.21 A provision would also meet the definition of a 

intergovernmental mandate if it relates to an existing federal program of 

$500 million or more (annually) to state, local, and tribal governments if the 

provision would increase the stringency of conditions of funding, place 

caps or reduce the funding and the state, local, or tribal governments 

cannot modify their financial or programmatic responsibilities regarding 

the federal program. 

A private sector mandate is also a provision that would reduce or eliminate 

the amount of authorization of appropriations for federal financial 

21Specifically, UMRA includes reductions in appropriations to state, local, or tribal 

governments for complying with previously imposed duties unless they are reduced or 

eliminated by the amount of reduction; or the control of borders by the federal government; 

or reimbursement to state, local, or tribal governments for various costs associated with 

illegal aliens, when such a reduction or elimination would result in increased costs to state, 

local, or tribal governments for costs associated with illegal aliens; except if the state, local, 

or tribal governments have not cooperated with the federal government to locate, 

apprehend, and deport illegal aliens. 

Page 13 GAO-04-637 Unfunded Mandates 
assistance that would be provided to the private sector for the purposes of 

ensuring compliance with such an enforceable duty. 

UMRA also excludes certain provisions from its application. Specifically, 

UMRA does not apply to any provision in legislation that: 

1. enforces Constitutional rights of individuals; 

2. establishes or enforces any statutory rights that prohibit discrimination 

on the basis of race, color, religion, sex, national origin, age, handicap, 

or disability; 

3. requires compliance with accounting and auditing procedures with 

respect to grants or other money or property provided by the federal 

government; 

4. provides for emergency assistance or relief at the request of any state, 

local, or tribal government or any official of a state, local, or tribal 

government; 

5. is necessary for the national security or the ratification or 

implementation of international treaty obligations; 

6. the President designates as emergency legislation and that Congress so 

designates in statute; or 

7. relates to the old age, survivors, and disability insurance program under 

title II of the Social Security Act (including taxes imposed by sections 

3101(a) and 3111(a) of the Internal Revenue Code of 1986 relating to 

old-age, survivors, and disability insurance). 

If provisions are excluded, CBO will state the reason for the exclusion and 

make no statement regarding mandates in those provisions. 

If a provision is not excluded and meets the definition of a federal mandate 

without exception under UMRA, CBO identifies the provision as a federal 

mandate under UMRA, and then determines if a cost estimate is feasible. 

For intergovernmental mandates, if a cost estimate is feasible, the direct 

costs (to state, local, or tribal governments) of all mandates contained 

within the legislation must equal or exceed $50 million (in 1996 dollars) in 

any of the first 5 fiscal years that the relevant mandates would be effective 

for CBO to determine that the mandate meets or exceeds UMRA’s cost 

Page 14 GAO-04-637 Unfunded Mandates 
threshold. The same requirements apply for private sector mandates, 

except that the cost threshold is $100 million (in 1996 dollars) or more. 

CBO adjusts both the intergovernmental and private sector cost thresholds 

annually for inflation. If an intergovernmental mandate exceeds the cost 

threshold, a point of order is available under UMRA. However, if a private 

sector mandate exceeds the cost threshold, a point of order is not available. 

If an intergovernmental or private sector mandate is below the applicable 

threshold, CBO states that a mandate (intergovernmental or private) exists 

with costs estimated to be below the threshold. Although this highlights 

the provision as mandate, it does not provide for a point of order under 

UMRA. 

Cost Estimates May Not Be Developing a cost estimate for federal mandates must be feasible, and their 

Feasible or Complete direct costs must meet or exceed applicable cost thresholds for CBO to 

identify them as such under UMRA. However, in some instances, it is not 

feasible to develop a cost estimate. 

CBO indicated in its annual report for 2002 that common reasons why a 

cost estimate may not be feasible include (1) the costs depend on future 

regulations, (2) essential information to determine the scope and impact of 

the mandate is lacking, (3) it is unclear whom the bill’s provisions would 

affect, and (4) language in UMRA is ambiguous about how to treat 

extensions of existing mandates. If a cost estimate for legislation is not 

feasible, CBO specifies the kind of mandate it contains, but that the agency 

cannot estimate its costs. This does not prevent the legislation from 

moving through the legislative process, but in the case of an 

intergovernmental mandate, UMRA would still allow a member of 

Congress to raise a point of order. 

CBO reported that it could not estimate the costs of mandates in nine bills 

that ultimately were enacted during 2001 and 2002. Of these nine laws, 

seven contained intergovernmental mandates and two contained both 

private sector and intergovernmental mandates. For example, CBO could 

not estimate the costs of provisions requiring manufacturers of medical 

devices to comply with certain labeling and notification conventions and to 

submit their registrations electronically contained in the Medical Device 

User Fee and Modernization Act of 2002.22 CBO stated that since many of 

the requirements in the act would depend on the future actions of the 

22Pub. L. No. 107-250. 

Page 15 GAO-04-637 Unfunded Mandates 
Secretary of Health and Human Services, CBO could not determine 

whether their direct costs would exceed UMRA’s threshold. 

Even if costs can be estimated, UMRA focuses only on the direct costs 

imposed by federal mandates in legislation. According to UMRA, such 

costs are limited to spending that results directly from the mandates 

imposed by the legislation, rather than from the legislation’s broad effects 

on the economy. The direct costs of a federal mandate also include any 

new revenues that state and local governments are prohibited from raising. 

While CBO has estimated the indirect costs of some federal mandates, CBO 

is limited to including only direct costs when determining if the aggregate 

total costs of federal mandates in legislation meet or exceed the applicable 

cost thresholds under UMRA. CBO testified in July 2003 that, “federal 

mandates often have secondary effects, including the effects on prices and 

wages when the costs of a mandate imposed on one party are passed along 

to other parties, such as customers or employees.” CBO told us that if it 

determined that indirect costs (including secondary effects) would be 

significant, it would include the estimate in its UMRA statement, but that its 

determination of whether a mandate meets or exceeds the applicable 

thresholds is based only on direct costs. Therefore, although information 

on indirect costs may be available, legislation with significant total costs 

(direct and indirect) on nonfederal parties may not be identified as 

exceeding the cost thresholds under UMRA. 

CBO may conclude that legislation contains a federal mandate and is 

funded because the legislation authorizes funds to be appropriated to carry 

out or comply with the mandates. However, if the appropriation 

subsequently provided is less than the amount authorized, the federal 

mandate’s costs may be at or above the threshold. 

UMRA contains a mechanism designed to help curtail mandates with 

insufficient appropriations, but it has never been utilized. UMRA provides 

language that could be included in legislation that would allow agencies 

tasked with administering funded mandates to report back to Congress on 

the sufficiency of those funds.23 Congress would then have a certain time 

232 U.S.C. § 658d(a)(2)(B). 

Page 16 GAO-04-637 Unfunded Mandates 
period to decide whether to continue to enforce the mandate, adopt an 

alternate plan, or let it expire, meaning the provision comprising the 

mandate would no longer be enforceable. A CBO official did not recall any 

legislation ever containing this provision, and our database search has also 

resulted in no legislation found containing this provision.

24 

CBO Identified Few Laws in 

2001 and 2002 as Containing 

Federal Mandates at or 

Above UMRA’s Cost 

Threshold, But UMRA May 

Have an Indirect Effect 

Although few laws have been identified as containing federal mandates at 

or above applicable cost thresholds, there is some evidence that UMRA has 

a discouraging effect on the enactment of intergovernmental mandates and 

the magnitude of costs to nonfederal parties in proposed legislation. 

Of 377 laws enacted in 2001 and 2002, CBO identified at least 44 containing 

a federal mandate under UMRA. Of these 44, CBO identified 5 containing 

mandates at or above the cost thresholds, and all were private sector 

mandates (see tables 1 and 2 below). From 1996 to 2000, CBO identified 18 

mandates (2 intergovernmental and 16 private sector) with costs at or 

above cost thresholds that became law. 

Table 1: Legislation Enacted in 2001 and 2002 that CBO Identified as Containing Federal Mandates Under UMRA 

2001 2002 Both Years 

Number of laws 

enacted 108 269 377 

Type of mandate(s) Private a Private Both Private a Both 

Intergovernmental sector Intergovernmental sector types Intergovernmental sector types 

Laws with mandate 12 At least 1 8 11 12 20 At least 12 

Laws with mandate 

at or above cost 

threshold 0 1 0 4 0 0 5 

Source: CBO. 

a

CBO’s annual report for 2001 did not separately report the number of laws that contained private 

sector mandates, but did report 1 law containing a private sector mandate above the cost threshold. 

Adding the 11 laws that CBO identified as containing private sector mandates in 2002 yields at least 12 

laws during 2001 and 2002 that contained private sector mandates (exclusive of laws that contained 

both private sector and intergovernmental mandates). 

24 Search conducted on Lexis on January 22, 2004, for bills and committee reports containing 

this provision. 

Page 17 GAO-04-637 Unfunded Mandates 

12 

0 
Table 2: Laws Enacted in 2001 and 2002 that CBO Identified as Containing Federal Mandates Meeting or Exceeding UMRA’s Cost 

Threshold 

Law Mandate Cost information 

Aviation and Transportation Imposes a user fee to fund aviation-security CBO estimated that the direct costs to air carriers (net 

Security Act of 2001 (Pub. L. No. 

107-71) 

programs; requires security enhancements 

on aircraft; imposes additional security 

procedures 

of savings) would range from $313 million in 2002 to 

$1.0 billion in 2006. 

Bipartisan Campaign Reform Act Bans “soft-money” collections by national CBO estimated that net direct costs to the private 

of 2002 (Pub. L. No. 107-155) political parties sector (including national political parties and 

broadcasters) could exceed $300 million in a 

Changes procedures for collection and use Presidential election year. 

of campaign contributions 

Farm Security and Rural Requires that some foods carry labels CBO estimated that increased costs to milk handlers 

Investment Act of 2002 (Pub. L. indicating their country of origin could total $1.3–1.5 billion annually. Most of this cost 

No. 107-171) would be passed to consumers. CBO estimated that 

Establishes new minimum prices for fluid the costs to retailers and suppliers to provide origin 

milk in different regions labeling could be as high as $1 billion annually. 

Job Creation and Worker Extends the requirement that health insurers CBO estimated that the direct costs of extending the 

Assistance Act of 2002 (Pub. L. cover mental health and medical benefits requirement to cover mental health would be $270 

No. 107-147) equally million in 2002 for the private sector (group health 

plans) and would increase premiums for group health 

Limits nonaccrual accounting insurance. 

Alters treatment of indebtedness for CBO estimated the direct costs of the Consolidated 

S corporations Omnibus Budget Reconciliation Act of 1985 (COBRA) 

continuation to be $200 million in 2002. 

Anton’s Law of 2002 (Pub. L. No. Requires automobile manufacturers to install CBO estimated that auto manufacturers would spend 

107-318) a lap and shoulder-belt harness in the as much as $1 billion to install new belts. 

center-rear seating position of certain 

vehicles 

Source: CBO. 

UMRA May Have Discouraged 

the Enactment of Proposed 

Unfunded Intergovernmental 

Mandates and Helped Reduce 

the Costs of Some Mandates 

UMRA may have indirectly discouraged the passage of legislation identified 

as containing intergovernmental mandates at or above UMRA’s cost 

threshold. Since 1996 only three proposed intergovernmental mandates 

with annual costs above the applicable threshold had become law (an 

increase in the minimum wage in 1996, a reduction in federal funding for 

Food Stamps in 1997, and a preemption of state laws on premiums for 

prescription drug coverage in 2003). 

Between 1996 and 2002, CBO reported that 21 private sector mandates with 

costs over the applicable threshold were enacted. Of these, 8 involved 

taxes, 4 concerned health insurance, 4 dealt with regulation of industries, 2 

affected workers’ take home pay, 1 imposed new requirements on sponsors 

of immigrants, 1 changed procedures for the collection and use of 

Page 18 GAO-04-637 Unfunded Mandates 
campaign contributions, and 1 imposed fees on airline travel to fund 

aviation security. 

UMRA may have also aided in lessening the costs of some mandates. From 

1996 through 2000, CBO identified 59 proposed federal mandates with 

costs above applicable thresholds. Subsequent to CBO identification, 9 

were amended before enactment to reduce their costs below the applicable 

thresholds, while 18 mandates were enacted with costs above the 

threshold, and 32 were never enacted. Although CBO has not done an 

analysis to determine the role of UMRA in reducing the costs of mandates 

ultimately enacted, it did state in its report that “it was clear that 

information provided by CBO played a role in the Congress’s decision to 

lower costs.” 

There is also some testimonial evidence regarding the effectiveness of 

UMRA on legislation. CBO stated in its July 2003 congressional testimony 

that “both the amount of information about the cost of federal mandates 

and Congressional interest in that information have increased considerably. 

In that respect, title I of UMRA has proved to be effective.” The Chairman 

of the House Rules Committee was quoted in 1998 as saying that UMRA 

“has changed the way that prospective legislation is drafted... Anytime 

there is a markup [formal committee consideration], this always comes 

up.” Although points of order are rarely used, they may be perceived as an 

unattractive consequence of including a mandate above cost thresholds in 

proposed legislation. The director of policy and federal relations at the 

National League of Cities stated, “This is like a shoal out in the water. You 

know it is there, so you steer clear of it.” 25 

25See Congressional Quarterly Weekly Reports, p. 2318 (Washington, D.C.: Sept. 5, 1998). 

Page 19 GAO-04-637 Unfunded Mandates 
Nonfederal Parties 

Perceived Some Enacted 

Provisions as Having 

Unfunded Mandate 

Implications 

Overall, CBO’s annual reports from 2001 and 2002 showed that most 

proposed legislation did not contain federal mandates as defined by UMRA. 

Further, most of the proposed legislation with mandates would not have 

imposed costs exceeding the thresholds set by UMRA.

26 We asked CBO to 

compile a list of examples from among those laws enacted in 2001 and 2002 

that it perceived as having impacts on nonfederal parties but were not 

identified as containing federal mandates meeting or exceeding UMRA’s 

cost thresholds. We then analyzed these 43 examples to illustrate the 

application of UMRA’s procedures, definitions, and exclusions on 

legislation that was not identified as containing mandates at or above 

UMRA’s threshold, but might be perceived to have “unfunded mandates” 

implications. We shared CBO’s list of 43 examples with national 

organizations representing nonfederal levels of government, and they 

generally agreed that those laws contained provisions perceived by their 

members as mandates.27 

For 12 of the 43 examples, an automatic UMRA review was not required of 

at least some provisions prior to enactment because of the legislative 

process used to enact the bill, for example, not being reported by an 

authorizing committee. Out of the remaining 31 laws that did undergo a 

cost estimate, 24 were found to contain mandates with costs below 

applicable thresholds, 3 contained provisions that were excluded, 2 

contained provisions with direct costs that were not feasible to estimate, 1 

contained a provision that did not meet UMRA’s definition of a mandate, 

and 1 was reviewed by JCT and found not to contain any federal mandates 

(see fig. 2). It should be noted that the number of laws in any of the 

categories listed do not necessarily correlate with the magnitude of 

perceived or actual impact on affected nonfederal parties. 

26For more detailed information on all legislation from 2001 and 2002 identified by CBO as 

including federal mandates, see CBO’s annual reports on its activities under UMRA 

(www.cbo.gov). 

27 We also shared this list with organizations representing the private sector, but received no 

response. 

Page 20 GAO-04-637 Unfunded Mandates 
Figure 2: How Certain Examples of Laws with Impacts on Nonfederal Parties Were Treated Under UMRA 

43 examples of laws with 

impacts on nonfederal parties 

31 laws contained provisions that were reviewed, but were not identified 

as federal mandates exceeding the applicable UMRA cost thresholds 

12 laws contained at least one 

provision not required to be 

automatically reviewed by CBO prior 

to enactment 

1 law did not meet the 

definition of a 

mandate under UMRA 

1 law was reviewed by JCT 30 laws were reviewed by 

CBO prior to enactment 

26 laws contained at 

least one federal 

mandate under UMRA 

3 laws contained at least 

one provision that was 

excluded from UMRA 

4 laws contained 

mandates added after 

CBO’s UMRA review 

8 laws were 

appropriations bills or 

were not reported by 

an authorizing 

committee 

2 laws contained provisions 

with direct costs that were 

not feasible to estimate 

12 laws contained provisions not required by UMRA to be 

automatically reviewed prior to enactment 

24 laws contained 

provisions below 

UMRA’s cost 

thresholds 

Source: CBO. 

Of the 12 examples of laws with provisions that CBO was not required to 

review prior to enactment, CBO later determined how they would have 

been characterized under UMRA: 5 laws contained mandates with direct 

costs below UMRA’s thresholds, 4 laws contained mandates with direct 

costs that could not be estimated, 1 was excluded under UMRA for national 

security so would not be reviewed for the presence of mandates, 1 did not 

meet the definition of a mandate, and 1 had some provisions with costs 

below the threshold and some provisions excluded (again, for national 

security).28 (See app. II for more detailed information on the 43 examples.) 

28Among the four laws containing mandates for which direct costs could not be estimated, 

some provisions had cost(s) estimated to be below the applicable cost threshold and others 

had cost(s) that were uncertain. 

Page 21 GAO-04-637 Unfunded Mandates 
Some Legislation Had Potentially Although cost estimates of the full impact (including direct and indirect 

Significant Impacts on costs) are not available for all 43 examples discussed previously, table 3 

Nonfederal Parties describes 10 laws among the 43 that we consider important to highlight 

and/or have multiple uncertainties surrounding the magnitude of their 

potential impacts on nonfederal parties. 

Table 3: Selected Examples of Statutes with Potentially Significant Impacts on Nonfederal Parties 

Reason(s) the statute was not identified 

GAO Description of potential impacts on as containing a federal mandate 

ID Rule nonfederal parties exceeding costs thresholds 

L1 Economic Growth and Tax Relief Increases tax credits and phases out the Did not meet the definition of a mandate 

Reconciliation Act of 2001 (Pub. L. estate and generation-skipping transfer tax, (no enforceable duty on state, local, or 

No. 107-16) which impacts state tax revenues. tribal governments or the private sector). 

JCT determined that the act did not 

contain any intergovernmental mandates 

or revenue raising provisions in excess of 

UMRA thresholds. 

L7 USA PATRIOT Act of 2001 (Pub. L. 

No. 107-56) 

Multiple provisions preempting state and local 

laws in regard to disclosure of financial and 

consumer reporting information, and liability 

laws relating to education agencies and 

institutions. Restricts states’ authority to issue 

licenses for operating motor vehicles to 

transport hazardous materials, and prohibits 

certain parties from shipping or receiving 

biological toxins in interstate or foreign 

commerce. 

Some provisions were not reviewed prior 

to enactment because mandates were 

added after CBO review. Some provisions 

were excluded for national security. 

After enactment, CBO estimated that 

provisions that were mandates had costs 

below thresholds. 

L18 No Child Left Behind Act of 2001 Imposes various requirements including state Did not meet the definition of a mandate 

(Pub. L. No. 107-110) standards and assessments, progress because the requirements were a 

requirements, and other provisions, and condition of federal financial assistance. 

provides grants associated with these 

requirements. 

L22 Public Health Security and Contains multiple provisions requiring Provisions were not reviewed prior to 

Bioterrorism Preparedness and assessments of water supplies and other enactment because an authorizing 

Response Act of 2002 (Pub. L. No. measures including extending prescription committee did not report them. After 

107-188) drug application fees, and registration enactment, CBO stated some provisions 

requirements for food processors. were funded, some were estimated to be 

below thresholds, and the costs of others 

were uncertain. 

L25 Sarbanes-Oxley Act of 2002 (Pub. Established the Public Company Accounting CBO stated the costs of several provisions 

L. No. 107-204) Oversight Board (PCAOB), and required new were uncertain, but the operations of the 

financial disclosures of public companies. PCAOB and another standard-setting 

body would be $80 million per year and 

would be funded by fees assessed on 

public companies. 

Page 22 GAO-04-637 Unfunded Mandates 
(Continued From Previous Page) 

Reason(s) the statute was not identified 

GAO Description of potential impacts on as containing a federal mandate 

ID Rule nonfederal parties exceeding costs thresholds 

L32 Medical Device User Fee and Allows the assessment of user fees from CBO stated that some costs were below 

Modernization Act of 2002 (Pub. L. manufactures of medical devices to defray the the threshold and others were uncertain 

No. 107-250) cost to the Food and Drug Administration of because they depended on the future 

administering the approval of devices. actions of a government agency. 

Requires medical device manufacturers to 

comply with certain labeling and notification 

conventions and to submit their registrations 

electronically. 

L34 Help America Vote Act of 2002 Places a number of requirements on state and Some provisions excluded because they 

(Pub. L. No. 107-252) local governments regarding federal elections enforced the constitutional rights of 

including standards for voting systems, individuals. For some other provisions, 

computerized databases, and procedural CBO stated that any costs to state, local, 

development for provisional voting. The act or tribal governments would be incurred 

also authorized grants for these requirements. voluntarily from participating in grant 

programs. 

L36 Homeland Security Act of 2002 Contains provisions including the preemption CBO estimated some costs would be 

(Pub. L. No. 107-296) of state and local laws in regard to disclosure below the threshold and others were 

of information, and requirements for training uncertain. A mandate requiring air carriers 

for airlines. to provide flight attendants with a method 

of communicating with pilots was added 

after CBO review, and thus its costs were 

not estimated prior to enactment. After 

enactment, CBO stated the costs of this 

mandate were uncertain. 

L37 Terrorism Risk Insurance Act of Requires commercial property insurers to offer CBO estimated some costs were below 

2002 terrorism insurance, and requires insurers and thresholds, while others were uncertain. 

(Pub. L. No. 107-297) policyholders to pay assessments. The mandate requiring insurers to offer 

terrorism insurance was added after CBO 

review, and thus its costs were not 

estimated. After enactment, CBO stated 

that the costs of this mandate were 

uncertain. 

L41 Veterans Benefits Act of 2002 Establishes a temporary exemption of some CBO stated the costs of this mandate were 

(Pub. L. No. 107-330) National Guard members from certain uncertain since the number of National 

financial obligations. Guard members called to active duty in the 

future is uncertain. CBO stated other costs 

were below applicable thresholds. 

Source: GAO. 

The following paragraphs provide more detailed descriptions regarding 2 of 

these 10 examples. One law contained a definitional exception and was not 

identified as containing any mandates. The other law was identified as 

containing both intergovernmental and private sector mandates. 

The No Child Left Behind Act is a well-known example that has 

intergovernmental implications, but was not identified as a federal 

Page 23 GAO-04-637 Unfunded Mandates 
mandate under UMRA. No Child Left Behind provides federal grants for a 

host of education programs, requires states to design and implement 

standards and assessments, and provides financial penalties for states that 

fail to achieve certain standards over 2 consecutive years. CBO stated that 

the bill does not contain any federal mandates as defined by UMRA 

because any costs incurred by state, local, or tribal governments would 

result from complying with conditions of financial aid, a definitional 

exception under UMRA. 

Though it does not meet the UMRA definition of a federal mandate, No 

Child Left Behind is still perceived as an “unfunded mandate” by some 

interested parties. In a recent radio advertisement, the president of the 

National Education Association described this act as a “huge unfunded 

federal mandate.”

29 In response to our query, NCSL listed No Child Left 

Behind as one of the most important statutes that was not identified as a 

federal mandate, but should have been. A recent newspaper article 

identified 15 states with resolutions, bills, or studies that “protest” in one 

form or another against the act.

30 According to the article, some states 

claim that significant impacts resulting from No Child Left Behind may 

include the loss of funds if schools fail to make enough progress, extra 

costs for tutoring and teacher training, and costs associated with possible 

longer school days and summer school, all of which may be required to 

meet standards set by the act. 

Another example among the 10 laws is the Sarbanes-Oxley Act of 2002. 

CBO identified this law as containing both intergovernmental and private 

sector mandates. The intergovernmental mandate’s costs were estimated 

to not exceed the cost threshold, but the private sector mandates’ costs 

were uncertain, and could possibly exceed UMRA’s thresholds. Among the 

mandates contained in the law were provisions such as: (1) allowing 

PCAOB to assess fees on public companies, (2) establishing new standards 

for auditors and audit committees of public companies, (3) requiring public 

corporations to make enhanced financial disclosures to the Securities and 

29National Education Association radio advertisement, First Order of Business 

(Washington, D.C.: January 2004). 

30See, Washington Post, “More States Are Fighting ‘No Child Left Behind Law’” (Washington, 

D.C.: Feb. 19, 2004): A3. 

Page 24 GAO-04-637 Unfunded Mandates 
Exchange Commission (SEC), (4) requiring notices of blackout periods31 

from pension plan administrators to investors, and (5) prohibiting insider 

trades during pension fund blackout periods if stock was acquired based on 

connection of service as a director or executive officer. 

CBO indicated that the only costs associated with Sarbanes-Oxley’s federal 

mandates that the agency could estimate were for the notification of 

blackout periods by pension administrators, and the costs of operating 

PCAOB. CBO estimated the costs of providing notification of blackout 

periods fell below the UMRA thresholds but provided no quantified 

estimate, and CBO estimated the cost of running PCAOB and an associated 

standard-setting body to be approximately $80 million per year which 

would be funded from fees assessed on public companies. CBO stated it 

was uncertain if the rest of the mandates contained in Sarbanes-Oxley 

exceeded UMRA’s cost threshold of $115 million adjusted for inflation. 

Identification of 

Federal Mandates in 

Rules under Title II 

Procedurally, the identification of federal mandates under title II of UMRA 

is simpler than under title I. Although regulatory agencies generally are to 

assess the intergovernmental and private sector effects of all their actions, 

under UMRA title II they only need to publicly identify and prepare UMRA 

“written statements” on those rules that the agencies believe include a 

federal intergovernmental or private sector mandate that may result in 

expenditures of $100 million or more (adjusted for inflation) in any year. 

However, there are 14 definitional exceptions, exclusions, or other 

restrictions applicable to the identification of federal mandates in rules, 

compared to 10 that are applicable to identifying mandates in legislation. 

Agencies identified 9 of the 122 major and economically significant final 

rules published in 2001 and 2002 as containing federal mandates as defined 

by UMRA. However, based on our review of the published rules, we 

determined that 65 of the remaining rules imposed new requirements on 

nonfederal parties. Agencies cited, or could have cited, a variety of reasons 

that these 65 rules did not contain federal mandates under UMRA. 

Nevertheless, at least 29 of the 65 rules appeared to have significant 

financial impacts on affected nonfederal parties of $100 million or more in 

any year. 

31Blackout periods are the specified time periods when trades (purchase, sale, acquisition, 

or transfer of any equity security) are prohibited. 

Page 25 GAO-04-637 Unfunded Mandates 
UMRA Procedures for Rules 

Are Less Complex than for 

Legislation, But More 

Restrictions Apply to 

Identifying Federal 

Mandates 

UMRA’s process of identifying and reporting on rules with federal mandates 

is more straightforward than that for legislation. UMRA generally directs 

agencies to assess the effects of their regulatory actions on other levels of 

government and the private sector. However, the agencies only need to 

identify and prepare written UMRA statements on those rules that the 

agencies have determined include a federal mandate that may result in 

expenditures by nonfederal parties of $100 million or more (adjusted for 

inflation) in any year. Thus, unlike CBO’s reviews of proposed legislation, 

one cost threshold applies to both intergovernmental and private sector 

mandates in rules, and there is no public identification of potential federal 

mandates in rules before agencies determine whether such mandates 

exceed the threshold. As is the case for legislation, UMRA contains many 

definitions and exclusions that affect the extent to which agencies’ rules 

are considered to have federal mandates at or above the threshold. 

The three definitional provisions and seven general exclusions from UMRA 

that we previously identified as applicable to legislation also apply to 

federal rules. However, there are four additional restrictions to the 

identification of federal mandates in rules (i.e., in an UMRA statement): 

• UMRA’s requirements do not apply to provisions in rules issued by 

independent regulatory agencies.

32 

• Preparation of an UMRA statement, and related estimate or analysis of 

the costs and benefits of the rule, is not required if the agency is 

“otherwise prohibited by law” from considering such an estimate or 

analysis in adopting the rule. 

32According to the Paperwork Reduction Act, these include agencies such as the Commodity 

Futures Trading Commission, the Consumer Product Safety Commission, the Federal 

Communications Commission, the Federal Trade Commission, the Nuclear Regulatory 

Commission, the Securities and Exchange Commission, and “any other similar agency 

designated by statute as a Federal independent regulatory agency or commission” (44 U.S.C. 

3502(5)). 

Page 26 GAO-04-637 Unfunded Mandates 
• The requirement to prepare an UMRA statement does not apply to any 

rule for which the agency does not publish a general notice of proposed 

rulemaking in the Federal Register. This means that UMRA does not 

cover interim final rules and any rules for which the agency claimed a 

“good cause” or other exemption available under the Administrative 

Procedure Act of 1946 to issue a final rule without first having to issue a 

notice of proposed rulemaking.33 

• UMRA’s threshold for federal mandates in rules is limited to 

expenditures, in contrast to title I which refers more broadly to direct 

costs. Thus, a rule’s estimated annual effect might be equal to or greater 

than $100 million in any year—for example, by reducing revenues or 

incomes in a particular industry—but not trigger UMRA if the rule does 

not compel nonfederal parties to spend that amount. Under title I, 

though, the direct costs of a mandate in legislation also include any 

amounts that state and local governments are prohibited from raising in 

revenues to comply with the mandate. However, as in reviews of 

legislation, indirect costs of rules are not considered when determining 

whether a mandate meets or exceeds UMRA’s threshold. 

Two of these restrictions on UMRA’s scope in the regulatory process are 

essentially procedural. If a rule’s path to issuance was through an 

independent regulatory agency or a final rule with no prior proposed rule, 

any “mandate” included in the rule would not be subject to identification 

and review under UMRA. 

OIRA Monitors Agencies’ OIRA is responsible for the centralized review of significant regulatory 

Compliance with Title II actions published by executive branch agencies, other than independent 

Requirements regulatory agencies. Under Executive Order 12866, which was issued in 

September 1993, agencies are generally required to submit their significant 

draft rules to OIRA for review before publishing the rules. As part of this 

regulatory review process, OIRA monitors agencies’ compliance with 

UMRA. In the submission packages for their draft rules, federal agencies 

are to designate whether they believe the rule may constitute an unfunded 

335 U.S.C. 553. See also U.S. General Accounting Office, Federal Rulemaking: Agencies 

Often Published Final Actions Without Proposed Rules, GAO/GGD-98-126 (Washington, 

D.C.: Aug. 31, 1998). 

Page 27 GAO-04-637 Unfunded Mandates 
mandate under UMRA. According to OIRA representatives, consideration 

of UMRA is then incorporated as part of these regulatory reviews, and draft 

rules are expected to contain appropriate UMRA certification statements.

34 

OIRA’s guidance to agencies notes that the analytical requirements under 

Executive Order 12866 are similar to the analytical requirements under 

UMRA, and thus the same analysis may permit agencies to comply with 

both analytical requirements.

35 However, OIRA representatives pointed out 

that UMRA might also require agency consultations with state and local 

governments on certain rules, and this is something that OIRA will look for 

evidence of when it does its regulatory reviews. The officials also pointed 

out that UMRA provides OIRA a statutory basis for requiring agencies to do 

an analysis similar to that required by the executive order (which can be 

rescinded or amended at the discretion of the President). 

Agencies Identified Few Federal agencies identified 9 of the 122 major and/or economically 

Final Rules Published in significant final rules that federal agencies published in 2001 or 2002 as 

2001 and 2002 as Containing containing federal mandates under UMRA (see fig. 3).

36 

Federal Mandates 

34 OIRA also checks for related statements and certifications from agencies on the 

Regulatory Flexibility Act (5 U.S.C. 601-612), which requires agencies to assess the impact 

of forthcoming regulations on “small entities,” Executive Order 13132 which requires 

agencies to assess the federalism implications of their regulations, and other requirements 

that might be triggered by the nature of the draft rule. 

35 As pointed out in our previous report on UMRA (GAO/GGD-98-30), the committee reports 

for the Senate bill that ultimately resulted in UMRA indicate that Congress was aware that, 

in many respects, the bill duplicated existing requirements, including those already required 

under Executive Order 12866. 

36 Although we refer broadly to “final rules,” these also included other regulatory actions 

with legal effect (such as interim rules, temporary rules, and some notices), in contrast to 

proposed rules that do not have legal effect. 

Page 28 GAO-04-637 Unfunded Mandates 
Figure 3: Few Final Rules Published in 2001 and 2002 Contained Federal Mandates Under UMRA 

9 rules were identified as containing 

federal mandates at or above UMRA's 

threshold 

122 rules 

(major and/or economically significant) 

1 rule probably contained a federal 

mandate 

28 rules imposed significant costs or 

negative financial effects (direct or 

indirect) but UMRA exclusions or 

exceptions applied 

36 rules did not impose significant costs 

or financial effects and UMRA 

exclusions or exceptions applied 

48 rules did not contain any 

new requirements 

28 did not contain federal mandates at or 

above UMRA's threshold but imposed 

significant impacts on nonfederal parties 

84 did not contain federal mandates at or above 

UMRA's threshold and did not impose significant 

impacts on nonfederal parties 

10 were or should have been identified as 

containing federal mandates at or above 

UMRA's threshold 

65 rules contained some 

new requirement(s) 

113 rules were not identified as 

containing federal mandates at 

or above UMRA's threshold 

Source: GAO. 

Only one of the nine rules that agencies identified as containing federal 

mandates under UMRA—EPA’s enforceable standard for the level of 

arsenic in drinking water systems—included an intergovernmental 

mandate. The remaining rules imposed private sector mandates: 

• four Department of Energy rules that amended energy conservation 

standards for several categories of consumer products, including 

clothes washers and heat pumps; 

• three EPA rules that adopted emission standards to reduce air pollution 

from various sources, including paper and pulp mills and heavy-duty 

highway engines and vehicles; and 

Page 29 GAO-04-637 Unfunded Mandates 
• a Department of Transportation (DOT) rule that established a new 

federal motor vehicle safety standard that required tire pressure 

monitoring systems, controls, and displays. 

In each of these final rules, the agencies addressed the applicable UMRA 

analytical and reporting requirements. (See app. III for more detailed 

information on these rules.) The limited number of rules identified as 

federal mandates during 2001 and 2002 is consistent with the findings in 

our 1998 report on UMRA and in OMB’s annual reports on agencies’ 

compliance with title II.

37 

Most Often Rules with 

Financial Effects on 

Nonfederal Parties Did Not 

Trigger UMRA’s 

Requirements Because They 

Did Not Require 

Expenditures at or Above 

UMRA’s Threshold 

Of the 113 major and/or economically significant rules not identified as 

including federal mandates under UMRA, we determined that 48 contained 

no new requirements that would impose costs or have a negative financial 

effect on state, local, and tribal governments or the private sector. Often, 

these were economically significant or major rules because they involved 

substantial transfer payments from the federal government to nonfederal 

parties. For example, the Department of Agriculture (USDA) published a 

final rule that expanded loans, loan deficiency payments, and working 

assistance loans for certain agricultural commodities, such as cotton and 

honey, and was expected to increase federal outlays by about $1.1 billion 

annually. The Department of Health and Human Services (HHS) published 

a notice updating the Medicare payment system for home health agencies 

that was estimated to increase federal expenditures to those agencies by 

$350 million in fiscal year 2002. 

However, we determined that 65 of the 113 rules contained new 

requirements that would impose costs or result in other negative financial 

effects on state, local, and tribal governments or the private sector. We 

shared this list of rules with national organizations representing other 

levels of government affected by these rules.38 Representatives of those 

organizations generally confirmed that all of the 65 rules were perceived by 

their members to have at least some “unfunded mandates” implications. 

37See GAO/GGD-98-30. 

38We also shared our lists with organizations representing the private sector, but received no 

formal responses from them. 

Page 30 GAO-04-637 Unfunded Mandates 
Page 31 GAO-04-637 Unfunded Mandates

In 41 of the 65 published rules, the agencies cited a variety of reasons for 

determining that these rules did not trigger UMRA’s requirements (see fig. 

4). There were 26 rules in which the agencies stated that the rule would not 

compel expenditures at or above the UMRA threshold and 10 rules in which 

the agencies stated that rules imposed no enforceable duty. For 24 of the 

65 rules, the agency did not provide a reason. However, independent 

regulatory agencies, which are not covered by UMRA, published 12 of these 

24 rules, and there is no UMRA requirement for covered agencies to 

identify the reasons that their rules do not contain federal mandates.

Figure 4: Agencies’ Reasons for Determining that Their Rules Did Not Trigger UMRA’s Requirements

Note: Agencies cited more than one reason for nine of the rules.

Our review of the 65 rules indicated that agencies did not cite all of the 

applicable reasons they could have for determining that the rules did not 

trigger UMRA’s requirements (see fig. 5). For example, although in only 3 

of the 65 rules did the agencies identify the absence of a notice of proposed 

rulemaking as the reason the rule did not trigger UMRA, this reason applied 

to another 25. Similarly, although 5 rules cited the exclusion that any 

enforceable duties would occur as a consequence of participation in a 

voluntary federal program, another 21 rules could have claimed this 

exclusion. Between what agencies cited or could have cited, 47 of the 65 

rules (72 percent) had more than one applicable reason. (For each of the 

3

3

3

5

10

26

0 5 10 15 20 25 30

Number of rules

Rule does not require $100 million or 

more in expenditures

Rule contains no enforceable duty

Duties are part of a voluntary program

Duties are a condition of federal

financial assistance

Analysis otherwise prohibited by law

Rule promulgated without a notice of 

proposed rulemaking

Source: GAO.
Page 32 GAO-04-637 Unfunded Mandates

65 rules, app. IV identifies the reasons that agencies cited or could have 

cited for their rules not triggering UMRA.) 

Figure 5: Reasons that Agencies Could Have Claimed for Their Rules Not Triggering UMRA

Note: More than one unclaimed reason applied to 29 rules.

Some Rules that Did Not Trigger 

UMRA Had Potentially 

Significant Effects on Nonfederal 

Parties

At least 29 of the 65 rules with new requirements appeared to result in 

significant costs or other negative financial effects on state, local, and tribal 

governments or the private sector. In these 29 rules, the agencies either 

explicitly stated that they expected the rule could impose significant costs 

or published information indicating that the rule could result, directly or 

indirectly, in financial effects on nonfederal parties at or above the UMRA 

threshold. (Appendix V provides more detailed information on each of the 

29 rules that were not identified as federal mandates under UMRA, but that 

could impose significant costs or have other negative financial effects on 

state, local, and tribal governments or the private sector.)

These 29 rules not identified as federal mandates under UMRA, but with 

significant financial impacts on nonfederal parties, can be roughly 

categorized as follows:

1

1

2

2

2

3

9

12

17

21

25

0 5 10 15 20 25 30

Number of rules

Rule was promulgated without a notice of proposed rulemaking

Any enforceable duties arise from participation in a voluntary federal program

Rule will not result in expenditure of $100 million or more in any 1 year

Rule published by an independent regulatory agency

Any enforceable duties are a condition of federal financial assistance

Necessary for national security

Analysis otherwise prohibited by law

Emergency legislation

Rule establishes or enforces statutory rights that prohibit discrimination

Rule contains no enforceable duty

Requirements are for compliance with accounting and auditing procedures

Source: GAO.
Page 33 GAO-04-637 Unfunded Mandates

• 9 that imposed costs on individuals—a category included in UMRA’s 

definition of the private sector—exceeding $100 million in any year; 39 

• 5 that reduced the level of federal payments to nonfederal parties by 

more than $100 million in any year; 

• 4 with substantial indirect costs or economic effects on nonfederal 

parties;

• 4 from independent regulatory agencies that imposed substantial fees or 

other costs on regulated entities; 

• 3 published by DOT on aviation security in the aftermath of the 

September 11, 2001, terrorist attacks, which the agency noted “may 

impose significant costs,” although it did not prepare quantified 

estimates; 

• 2 with voluntary options that might increase Medicaid costs to states by 

over $125 million in some years; 

• 1 amending the Federal Acquisition Regulations that could result in 

nonfederal costs ranging from $92 million to $377 million annually, 

depending on the “uncertainty of manufacturers to distribute these 

costs over the general population;” and

• 1 USDA rule imposing private-sector costs to limit retained water in raw 

meat and poultry products.

Table 4 provides more detailed information about selected examples from 

among the 29 rules.

39UMRA section 421(9) defines the private sector as including all persons or entities in the 

United States, including individuals, partnerships, associations, corporations, and 

educational and nonprofit institutions, but not including state, local, or tribal governments.
Page 34 GAO-04-637 Unfunded Mandates

Table 4: Selected Examples of Final Rules with Significant Impacts on Nonfederal Parties that Did Not Trigger UMRA

Source: GAO.

We determined that 1 of the 29 rules, a USDA rule on retained water in raw 

meat and poultry products, probably was a federal mandate under UMRA. 

The rule establishes a requirement of zero retained water, unless the water 

retention is unavoidable in processes necessary to meet food safety 

GAO 

ID Rule 

Description of potential impacts on 

nonfederal parties

Reason(s) the rule did not trigger 

UMRA

R1 EPA final rule on identification of 

dangerous levels of lead in most 

pre-1978 housing and childoccupied facilities

The rule set standards for the identification of 

lead-based paint hazards, residential lead 

dust cleanup levels, and amendments to dust 

and soil sampling requirements. EPA 

estimated that the total costs of actions that 

might be taken based on these hazard 

standards (over a 50-year span) would be $69 

billion for the final dust and soil standards, $20 

billion for paint interventions, and $14 billion 

for testing.

EPA determined that the rule “in and of 

itself” did not mandate any action (no 

enforceable duty) or directly impose any 

costs (require expenditures of $100 million 

or more in any year).

R11 HHS final rule on revision to 

Medicaid upper payment limit 

requirements

The rule revised Medicaid’s upper payment 

limits for hospital services, nursing facility 

services, intermediate care facility services for 

the mentally retarded, and clinic services. The 

revisions would potentially reduce the federal 

share of payments made by states to these 

facilities by nearly $55 billion over 10 years.

The rule did not require states to spend 

$100 million or more in any year.

R20 Department of Commerce 

emergency interim rule to 

implement Steller sea lion 

protection measures in fisheries of 

the exclusive economic zone off 

Alaska

The rule restricted times and places for 

fishing. The agency estimated that, as a result 

of these restrictions, there could be a 

reduction in fishing industry gross revenues of 

$225 million to $401 million per year. 

The rule did not require the private sector 

to spend $100 million or more in any year, 

and there was no notice of proposed 

rulemaking.

R107 SEC final rule accelerating filing 

deadlines for annual and quarterly 

reports and adding requirements 

for additional reporting and 

disclosure

SEC stated that these amendments would 

increase costs to some affected reporting 

companies. In the proposed rule, SEC 

estimated that the initial costs could range 

from $29.9 million to $11.9 billion, and the ongoing annual costs could range from $75.5 

million to $686.8 million.

The rule was issued by an independent 

regulatory agency.

R115 HHS notice on Medicare program 

monthly actuarial rates and 

monthly supplementary medical 

insurance premium rate

Increased the cost of premiums for individuals 

enrolled in Medicare’s Supplemental Medical 

Insurance (SMI), with an estimated cost to 

enrollees of over $2 billion for 2003.

The agency said that this notice had “no 

consequential effect” on state, local, or 

tribal governments and that the private 

sector costs fell below UMRA’s threshold 

as well. 

Also, there was no notice of proposed 

rulemaking, and SMI is a voluntary federal 

program.
Page 35 GAO-04-637 Unfunded Mandates

requirements. USDA did not mention UMRA in the rule but estimated that, 

if extensive modifications to chilling systems were needed throughout the 

poultry industry, the fixed costs could run to “well over $100 million.” 

USDA provided only a “lower bound” estimate of $110 million in privatesector costs for the first year of implementation (representing the costs of 

reducing retained water in the range of 1 percent to 1.5 percent). While 

that estimate was under the $113 million UMRA threshold (adjusted for 

inflation) in 2001, the agency did not quantify median or upper bound cost 

estimates, which reference to a lower bound estimate implies. Because 

the lower bound estimate was so close to the UMRA threshold, it is 

reasonable to assume that a median or upper bound estimate would 

probably have equaled or exceeded the threshold, and the rule would have 

been a private sector mandate under UMRA. No other UMRA exclusion 

appeared to apply to this rule. However, to address the requirements of 

Executive Order 12866 the agency provided an analysis of the costs and 

benefits of the rule, as well as an analysis of the regulatory alternatives 

considered. As noted earlier, OIRA guidance points out that the same 

analysis may permit agencies to comply with both the executive order’s and 

UMRA’s requirements.

For the remaining 36 of the 65 rules, either the agencies provided no 

information on the potential costs and economic impacts on nonfederal 

parties or the costs imposed on them were under the UMRA threshold. For 

example, a Federal Emergency Management Agency interim final rule on a 

grant program to assist firefighters included some cost-sharing and other 

requirements on the part of grantees participating in this voluntary 

program. In return for cost-sharing of $50 million to $55 million per year, 

grantees could obtain, in aggregate, federal assistance of approximately 

$345 million. Similarly, USDA’s interim rule on the noninsured crop 

disaster assistance program imposed new reporting requirements and 

service fees on producers estimated to cost at least $15 million. But 

producers were expected to receive about $162 million in benefits.
Page 36 GAO-04-637 Unfunded Mandates

Even when the requirements of UMRA did not apply, agencies generally 

provided some quantitative information on the potential costs and benefits 

of the rule to meet the requirements of Executive Order 12866. Rules 

published by independent regulatory agencies were the major exception 

because they are not covered by the executive order. In general, though, 

the type of information that UMRA was intended to produce was developed 

and published by the agencies even if they did not identify their rules as 

federal mandates under UMRA.40

Conclusions UMRA was intended to restrain the imposition of unfunded federal 

mandates on state, local, and tribal governments and the private sector, 

primarily by providing more information and focusing more attention on 

potential federal mandates in legislation and regulations. There is some 

evidence that the information provided under UMRA and the spotlight that 

information places on potential mandates may have helped to discourage 

or limit federal mandates. CBO’s annual reports indicate that, at least with 

regard to the legislative process, UMRA sometimes does have such an 

indirect preventive effect.

However, there are multiple ways that both statutes and final rules 

containing what affected parties perceive as “unfunded mandates” can be 

enacted or published without being identified as federal mandates with 

costs or expenditures at or above the thresholds established in UMRA. Our 

review demonstrated that many statutes and final rules with potentially 

significant financial effects on nonfederal parties were enacted or 

published without being identified as federal mandates at or above UMRA’s 

thresholds. Further, if judged solely by their financial consequences for 

nonfederal parties, there was little difference between some of these 

statutes and rules and the ones that had been identified as federal 

mandates with costs or expenditures exceeding UMRA’s thresholds. 

Although the examples cited in our review were limited to a 2-year period, 

our findings on the limited effect and applicability of UMRA are similar to 

the data reported in previous GAO, CBO, and OMB reports on the 

implementation of UMRA. The findings raise the question of whether 

UMRA’s procedures, definitions, and exclusions adequately capture and 

40One exception might be that OMB’s guidance to agencies for regulatory analyses prepared 

under Executive Order 12866 does not include instructions regarding distributional effects 

of regulations that are as specific as those called for in UMRA. See 2 U.S.C. §1532(a)(3). 
Page 37 GAO-04-637 Unfunded Mandates

subject to scrutiny federal statutory and regulatory actions that might 

impose significant financial burdens on affected nonfederal parties.

This report provides descriptive information and analysis regarding 

UMRA’s implementation, focusing specifically on the coverage and 

identification of federal mandates under UMRA. We are making no specific 

recommendations for executive action nor identifying any specific matters 

for consideration by Congress at this time. As requested, we will be 

continuing our work on other aspects of UMRA. 

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we will not distribute it until 30 days from the date of 

this letter. We will then send copies of this report to the Director of OMB 

and will provide copies to others on request. It will also be available at no 

charge on GAO’s Web site at http://www.gao.gov.

If you or your staff have any questions concerning this report, please 

contact me at (202) 512-6806 or daltonp@gao.gov. Key contributors to this 

report were Curtis Copeland, Naved Qureshi, Michael Rose, and Tim Bober.

Patricia A. Dalton

Director

Strategic Issues 
Page 38 GAO-04-637 Unfunded Mandates

Appendix I

Objectives, Scope, and Methodology ApApenednxidexiIs

In this report, you asked us to describe and provide examples of how 

federal statutes and rules with potentially significant financial implications 

for state, local, and tribal governments or the private sector may be enacted 

or issued without being identified as federal mandates under titles I and II 

of UMRA, which respectively address the legislative and regulatory 

processes. Our specific reporting objectives were to:

1. Describe the applicable procedures, definitions, and exclusions for 

identifying federal mandates in statutes and rules under UMRA. 

2. Identify statutes and final rules that contained federal mandates under 

UMRA.

3. Provide examples of statutes and final rules that were not identified as 

federal mandates, but that affected parties might perceive as 

“unfunded” mandates, and the reasons these statutes and rules were 

not federal mandates under UMRA. 

As agreed with your staff, we focused on statutes enacted and final rules 

published during 2001 and 2002 to address the second and third objectives. 

To address the first objective, regarding the procedures, definitions, and 

exclusions applicable to the identification of federal mandates under titles I 

and II of UMRA, we reviewed the act and other related guidance 

documents and reports on the implementation of UMRA. These other 

related documents included the various annual reports on UMRA prepared 

by CBO and OMB, materials used in a congressional parliamentary process 

training seminar on unfunded mandates and points of order, and OMB’s 

March 1995 guidance to federal agencies on the implementation of title II. 

We also interviewed persons knowledgeable about the implementation of 

UMRA in congressional offices, CBO, and OMB. 

To address the second and third objectives regarding statutes that were and 

were not identified as federal mandates under title I of UMRA, we 

consulted with the CBO officials responsible for preparing UMRA 

statements on individual bills. The CBO officials identified the 5 statutes 

enacted during 2001 and 2002 that contained federal mandates at or above 

UMRA’s cost thresholds. At our request, they also identified 43 examples of 

statutes enacted during that 2-year period that they believed, based on 

professional judgment, had potential intergovernmental or private sector 

impacts but had not been identified as containing mandates at or above 

UMRA’s thresholds. (We did not ask CBO to compile a comprehensive list 
Appendix I

Objectives, Scope, and Methodology

Page 39 GAO-04-637 Unfunded Mandates

of all statutes passed by the 107th Congress that may have had 

intergovernmental or private sector impacts.) To assure that this set of 

examples was relevant for our purposes and to confirm CBO’s 

characterization of the potential impacts of these statutes and the reasons 

why provisions were or were not identified as federal mandates, we 

reviewed available source material on each of these statutes. In particular, 

we examined the detailed descriptions and information on each statute that 

were contained in CBO mandate statements, cost estimates, annual 

reports, and testimony, as well as other relevant information on each 

statute from the Legislative Information System of Congress.

To address the second and third objectives regarding final rules that were 

and were not identified as federal mandates under title II of UMRA, we 

conducted a content analysis of all 122 major and/or economically 

significant final rules that agencies published in 2001 or 2002 to identify the 

rules that could have significant financial effects on nonfederal parties and 

determine why they were or were not considered federal mandates.1

 We 

chose not to review other rules because, by definition, they were less likely 

to have significant effects on nonfederal parties, although arguably some 

could have had a significant effect. To arrive at our final set of 122 rules, 

we relied primarily on the list of 119 major rules published during the 2-

year period, as identified in GAO’s compilation of reports on federal agency 

major rules.2

 Our Office of General Counsel takes several steps to assure 

the completeness of the list of major rules; however, to generally 

corroborate that this list of major rules included those that could have 

significant effects on nonfederal parties, we also compared GAO’s major 

rules list to the rules identified as “economically significant” by the

1

The terms “major” and “economically significant” rules are defined, respectively, by the 

Congressional Review Act and Executive Order 12866. However, both definitions are 

similar and refer generally to rules that will have an annual effect on the economy of $100 

million or more or raise other significant policy issues.

2

The Congressional Review Act requires agencies to submit their major rules to Congress 

and to us before those rules can take effect. We are required to prepare a report on each 

major rule to assure that the agency has complied with procedural requirements regarding 

cost-benefit analysis, regulatory flexibility analysis, and specified sections of UMRA. 

Pursuant to the Congressional Review Act, we provide these reports on major rules to the 

standing committees of jurisdiction of both Houses of Congress. The database is publicly 

available at www.gao.gov under GAO Legal Products.
Appendix I

Objectives, Scope, and Methodology

Page 40 GAO-04-637 Unfunded Mandates

Regulatory Information Service Center (RISC).3 As a result of this exercise, 

we supplemented our initial list with 3 additional rules.4 We then reviewed 

the Federal Register notices that agencies published for all 122 of these 

rules to confirm that they were major and/or economically significant and 

to identify whether, and to what extent, they imposed requirements on 

nonfederal parties. On the basis of our comparisons and reviews, we 

concluded that these data were sufficiently reliable for our purposes.

Because we were asked to identify rules that affected parties might 

perceive as intergovernmental or private sector mandates, even if not 

technically identified as such under UMRA, our initial screening used a 

broader definition of a potential mandate than delineated in UMRA. For 

this screening, we used the information in the published rules to make a 

team consensus judgment on whether a nonfederal party (state, local, and 

tribal governments or the private sector) might consider provisions of the 

rule to impose requirements or mandates that had at least some costs or 

negative financial effects. In particular, we focused on identifying rules 

that imposed new requirements and costs (direct or indirect) on affected 

parties. For each rule identified as including a potential “mandate,” team 

members then independently reviewed the text of each rule to code the 

reasons agencies may have cited that their rules were not federal mandates 

under UMRA, as well as other reasons available under UMRA that might 

have applied to these rules. The team members generally concurred in 

their initial coding, and, based on team discussions, we were able to 

resolve any differences and determine a team consensus judgment on the 

appropriate coding for each rule. 

To provide corroboration that the examples of statutes CBO identified and 

final rules we identified to address objective three were perceived by 

3

RISC is part of the General Services Administration, but works closely with OMB to provide 

the President, Congress, and the public with information on federal regulatory policies. Its 

major project has been to coordinate the development and publication of the Unified 

Agenda of Federal Regulatory and Deregulatory Actions, which is published twice a year.

4

Discrepancies between the two lists were expected because, although most rules defined 

as “major” under the Congressional Review Act are also defined as “economically 

significant” under Executive Order 12866, there is not an exact match. The major rules 

include those published by independent regulatory agencies not covered by the executive 

order, and rules from nonindependent agencies may be identified as economically 

significant for purposes of OMB regulatory reviews without necessarily triggering the $100 

million impact threshold that would define them as major.
Appendix I

Objectives, Scope, and Methodology

Page 41 GAO-04-637 Unfunded Mandates

affected parties as having “unfunded mandate” implications, we shared our 

draft lists of examples with national organizations representing other levels

of government.5 These organizations included the National Association of 

Counties, National Conference of State Legislatures, National Governors 

Association, the National League of Cities, and the U.S. Conference of 

Mayors. Their representatives generally concurred that the statutes and 

rules we focused on were perceived by their members to have “mandate” 

implications and that we had not left out any major examples from our time 

period that they believed were important.

One limitation of our review was that, in agreement with your staff, we 

focused on statutes enacted and final rules published during 2001 and 2002. 

Those statutes and rules may not reveal all of the ways in which provisions 

with significant cost effects might not be identified as federal mandates. 

Neither CBO nor we reviewed the many bills that were not enacted and 

rules that were proposed, but not finalized, during 2001 and 2002. 

However, our findings and the specific examples we identified were 

sufficient to illustrate how statutes and rules with potentially significant 

effects on nonfederal parties might not be identified as federal mandates 

under UMRA. In addition, our findings for this review were consistent with 

those in prior GAO, CBO, and OMB reports on the implementation of 

UMRA. In general, we also recognize that perceived “unfunded mandates” 

could also result from other nonstatutory, nonregulatory federal actions, 

such as Homeland Security threat level adjustments. However, UMRA does 

not cover such nonstatutory or nonregulatory actions, so they were out of 

the scope of this review.

We conducted our review from August 2003 through February 2004 in 

Washington, D.C., in accordance with generally accepted government 

auditing standards. On April 22, 2004, we provided a draft of this report to 

the Director of the Office of Management and Budget (OMB) for his review 

and comment. On April 29, 2004, an OMB representative notified us that 

OMB had no comments on our report. We also provided the draft to CBO 

officials for their technical review. We incorporated their comments and 

suggestions as appropriate. 

5

We also shared our lists with organizations representing the private sector, but received no 

formal responses from them.
Page 42 GAO-04-637 Unfunded Mandates

Appendix II

Examples of Statutes with Impacts on 

Nonfederal Parties that Were Not Mandates at 

or Above UMRA Thresholds ApendxiI

CBO provided us the following examples of laws enacted in 2001 and 2002 

that it believed had impacts on nonfederal parties, but were not identified 

as federal mandates at or above applicable cost thresholds (see table 5). A 

number of groups representing nonfederal parties generally agreed that 

these examples were statutes perceived to have “unfunded mandate” 

implications. 

Table 5: Examples of Statutes with Impacts on Nonfederal Parties that Were Not Identified as Federal Mandates at or above 

Applicable Cost Thresholds 

GAO ID Law

CBO’s description of potential impacts, or 

requirements on state, local, and tribal 

governments or the private sector

Reason(s) CBO did not identify one or more 

provisions as unfunded federal mandates at 

or above the costs thresholds under UMRA

L1 Economic Growth and Tax 

Relief Reconciliation Act of 

2001 (Pub. L. No. 107-16)

(Intergovernmental) Increases the unified tax 

credit and reduces the tax rates to phase out 

the estate and generation-skipping transfer tax. 

Did not meet the definition of a mandate (no 

enforceable duty on state, local, or tribal 

governments or the private sector). 

JCT determined that the act did not contain any 

intergovernmental mandates or revenue raising 

provisions in excess of UMRA thresholds.

L2 Supplemental 

Appropriations Act, 2001 

(Pub. L. No. 107-20)

(Intergovernmental) Places new reporting 

requirements on the District of Columbia.

CBO did not review provision prior to 

enactment.

Not contained in an authorizing bill. Contained 

in an appropriations bill.

CBO estimated costs were below threshold. 

L3 ILSA Extension Act of 

2001 (Pub. L. No. 107-24)

(Private Sector) Requires the President to 

impose certain sanctions on U.S. entities or 

foreign companies that have invested more 

than a specified amount of money in 

developing the petroleum and natural gas 

resources of Libya or Iran.

The act allows the President discretion to make 

exceptions in applying such sanctions. 

CBO estimated costs were below threshold. 

L4 Authorization for Use of 

Military Force (Pub. L. No. 

107-40)

(Private Sector) The act is intended to 

constitute specific statutory authorization to 

use U.S. armed forces within the meaning of 

the War Powers Resolution.

Excluded for national security.

CBO did not review provision prior to 

enactment because an authorizing committee 

did not report it.

L5 Air Transportation Safety 

and System Stabilization 

Act (Pub. L. No. 107-42)

(Private sector) Sets forth certain insurance 

requirements, including limiting air carrier 

liability for losses to no more than $100 million 

in the aggregate for all claims arising as a result 

of an act of terrorism.

CBO did not review provision prior to 

enactment because an authorizing committee 

did not report it.

Did not meet definition of a mandate.
Appendix II

Examples of Statutes with Impacts on 

Nonfederal Parties that Were Not Mandates 

at or Above UMRA Thresholds

Page 43 GAO-04-637 Unfunded Mandates

L6 Defense Production Act 

Amendments of 2001 

(Pub. L. No. 107-47)

(Private Sector) Provides the President the 

authority to require preferential performance on 

contracts and orders to meet approved national 

defense requirements, and to allocate 

materials, services, and facilities as necessary 

to promote the national defense in a major 

national emergency.

Excluded for national security.

L7 USA PATRIOT Act of 2001 

(Pub. L. No. 107-56)

(Intergovernmental) Prohibits state, local, tribal, 

or territorial governments from disclosing that 

they have reported a suspicious financial 

transaction to a federal agency.

(Intergovernmental) Preempts state liability 

laws and regulations relating to consumer 

reporting agencies that disclose consumer 

reports for counterterrorism purposes.

(Intergovernmental) Requires education 

agencies and institutions to disclose records to 

the Attorney General in a terrorism 

investigation or prosecution; preempts state 

liability laws relating to those agencies.

(Intergovernmental) Restricts states’ authority 

to issue licenses for operating motor vehicles to 

transport hazardous materials.

(Private Sector) Prohibits certain parties from 

shipping or receiving biological toxins in 

interstate or foreign commerce.

CBO did not review some provisions prior to 

enactment because some mandates were 

added to the bill after it was reviewed by CBO. 

After enactment, CBO estimated that 

provisions that were mandates had costs below 

thresholds.

For provisions reviewed prior to enactment, 

CBO estimated costs for some to be below 

threshold, and some other provisions were 

excluded for national security.

L8 Energy and Water 

Development 

Appropriations Act, 2002 

(Pub. L. No. 107-66)

(Intergovernmental) Prohibits states from 

issuing a permit or lease for certain oil and gas 

drilling in the Great Lakes.

CBO did not review provisions prior to 

enactment.

Not contained in an authorizing bill. Contained 

in an appropriations bill.

CBO estimated costs were below threshold. 

L9 Internet Tax 

Nondiscrimination Act 

(Pub. L. No. 107-75)

(Intergovernmental) Extends the prohibition on 

collecting certain types of state and local taxes.

CBO estimated costs were below threshold. 

L10 Agriculture, Rural 

Development, Food and 

Drug Administration, and 

Related Agencies 

Appropriations Act, 2002 

(Pub. L. No. 107-76)

(Private Sector) Requires some tobacco 

producers to have their product graded by the 

government for a fee.

CBO estimated costs were below threshold.

(Continued From Previous Page)

GAO ID Law

CBO’s description of potential impacts, or 

requirements on state, local, and tribal 

governments or the private sector

Reason(s) CBO did not identify one or more 

provisions as unfunded federal mandates at 

or above the costs thresholds under UMRA
Appendix II

Examples of Statutes with Impacts on 

Nonfederal Parties that Were Not Mandates 

at or Above UMRA Thresholds

Page 44 GAO-04-637 Unfunded Mandates

L11 Departments of 

Commerce, Justice, and 

State, the Judiciary, and 

Related Agencies 

Appropriations Act, 2002 

(Pub. L. No. 107-77)

(Intergovernmental) Expands an existing 

requirement that transportation officials report 

to the Immigration and Naturalization Service 

certain information about people traveling to 

the United States; authorizes the Attorney 

General to extend that requirement to cover 

any public or private carrier transporting people 

by land to the United States.

(Private Sector) Increases the entry fee for 

certain passengers arriving by airplane and 

authorizes the Attorney General to charge and 

collect a $3 entry fee on commercial vessel 

passengers; authorizes the Attorney General to 

require arrival and departure manifests in 

advance for land travel (train or bus) as well as 

travel by air or water.

CBO did not review provisions prior to 

enactment.

Not contained in an authorizing bill. Contained 

in an appropriations bill.

CBO estimated costs were below threshold.

L12 Department of 

Transportation and Related

Agencies Appropriations

Act, 2002 (Pub. L. No. 107-

87)

(Intergovernmental) Requires the Washington 

Metropolitan Area Transit Authority to change 

the name of the National Airport station and to 

change all signage and related documentation.

(Intergovernmental) Perhaps contained grants 

that were perceived as “under funded.” 

CBO estimated costs were below threshold.

L13 District of Columbia 

Appropriations Act, 2002 

(Pub. L. No. 107-96)

(Intergovernmental) Places new reporting and 

other requirements on the District of Columbia.

CBO did not review provisions prior to 

enactment.

Not contained in an authorizing bill. Contained 

in an appropriations bill.

CBO estimated costs were below threshold. 

L14 An act to amend chapter 

90 of Title 5, United States 

Code, relating to Federal 

long-term care insurance 

(Pub. L. No. 107-104)

(Intergovernmental) Preempts state authority 

to tax certain federal long-term care policies.

CBO estimated costs were below threshold.

L15 National Defense 

Authorization Act for Fiscal 

Year 2002 (Pub. L. No. 

107-107)

(Intergovernmental) Allows the Secretary of 

Defense, under some circumstances, to waive 

compliance with state or territorial fish and 

game laws at military installations or facilities. 

(Intergovernmental) Preempts certain 

California state laws that would prohibit or 

restrict the construction or approval of a road or 

highway on an easement within the Camp 

Pendleton Marine Corps base. 

CBO estimated costs were below threshold.

(Continued From Previous Page)

GAO ID Law

CBO’s description of potential impacts, or 

requirements on state, local, and tribal 

governments or the private sector

Reason(s) CBO did not identify one or more 

provisions as unfunded federal mandates at 

or above the costs thresholds under UMRA
Appendix II

Examples of Statutes with Impacts on 

Nonfederal Parties that Were Not Mandates 

at or Above UMRA Thresholds

Page 45 GAO-04-637 Unfunded Mandates

L16 Intelligence Authorization 

Act for Fiscal Year 2002 

(Pub. L. No. 107-108)

(Intergovernmental) Establishes the 

Commission on Preparedness and 

Performance of the Federal Government for the 

September 11 Acts of Terrorism and gives it 

authority to subpoena testimony and evidence. 

CBO estimated costs were below threshold.

L17 Best Pharmaceuticals for 

Children Act

(Pub. L. No. 107-109)

(Private Sector) Extends the time period that 

drug manufacturers are prohibited from 

marketing generic versions of certain drugs by 

6 months; repeals waiver of user fees for all 

applications for pediatric supplements; and 

requires drug manufacturers to revise labeling 

of drugs based upon findings of pediatric 

studies.

CBO estimated costs were below threshold.

L18 No Child Left Behind Act of 

2001(Pub. L. No. 107-110)

(Intergovernmental) Calls for designing and 

implementing statewide standards and 

assessments and various other requirements.

Did not meet UMRA’s definition of a mandate 

because the requirements were a condition of 

federal financial assistance.

L19 District of Columbia Family 

Court Act of 2001 (Pub. L. 

107-114)

(Intergovernmental) Places new reporting and 

administrative requirements on the mayor and 

court system of the District of Columbia.

CBO estimated costs were below threshold.

L20 Enhanced Border Security 

and Visa Entry Reform Act 

of 2002 (Pub. L. No. 107-

173)

(Private Sector) Requires manifests for arriving 

and departing commercial vessels or aircraft.

(Private Sector) Increases fees for certain 

visas.

CBO estimated costs were below threshold.

L21 Clergy Housing Allowance 

Clarification Act of 2002 

(Pub. L. No. 107-181)

(Private Sector) Restricted the amount of 

rental-allowance income that members of the 

clergy may exclude for tax purposes to no more 

than the fair rental value of the home (including 

furnishings) plus utilities. 

Not reported by an authorizing committee.

CBO did not review provision prior to 

enactment.

CBO estimated costs were below threshold.

(Continued From Previous Page)

GAO ID Law

CBO’s description of potential impacts, or 

requirements on state, local, and tribal 

governments or the private sector

Reason(s) CBO did not identify one or more 

provisions as unfunded federal mandates at 

or above the costs thresholds under UMRA
Appendix II

Examples of Statutes with Impacts on 

Nonfederal Parties that Were Not Mandates 

at or Above UMRA Thresholds

Page 46 GAO-04-637 Unfunded Mandates

L22 Public Health Security and 

Bioterrorism Preparedness 

and Response Act of 2002 

(Pub. L. No. 107-188)

(Intergovernmental) Preempts state laws that 

conflict with quarantine requirements for 

communicable diseases.

(Intergovernmental) Requires assessments of 

water supplies in communities of more than 

3,300 people.

(Intergovernmental) Extends prescription drug 

application fees.

(Intergovernmental and Private Sector) 

Requires registration with the federal 

government of the possession, use, and 

transfer of listed agents and toxins.

(Private Sector) Requires that certain facilities 

engaged in manufacturing, possessing, 

packing, or holding food for consumption in the 

United States register with the Department of 

Agriculture.

(Private Sector) Requires that if food has been 

refused admission into the United States, 

owners or consignees of the food must affix a 

label stating such on the container.

(Private Sector) Requires importers of certain 

drugs and their devices to register annually with 

the federal government.

(Private Sector) Allows prescription drug 

application fees to be raised under certain 

conditions.

CBO did not review provisions prior to 

enactment.

Not reported by an authorizing committee.

CBO estimated the costs of preemption of 

state laws was below the threshold, the costs 

of the water assessments were funded, and 

other costs were uncertain.

L23 Terrorist Bombings 

Convention 

Implementation Act of 

2002 (Pub. L. No. 107-197)

(Private Sector) The act would establish a 

sentence of life in prison or death for those who 

are convicted of participating in bombings in 

public places, government facilities, public 

transportation systems, or infrastructure 

facilities. In addition, the act would establish 

minimum prison sentences and criminal fines 

for those who provide or collect funds with the 

intent that such funds be used to carry out 

terrorism crimes.

Excluded for treaty implementation.

(Continued From Previous Page)

GAO ID Law

CBO’s description of potential impacts, or 

requirements on state, local, and tribal 

governments or the private sector

Reason(s) CBO did not identify one or more 

provisions as unfunded federal mandates at 

or above the costs thresholds under UMRA
Appendix II

Examples of Statutes with Impacts on 

Nonfederal Parties that Were Not Mandates 

at or Above UMRA Thresholds

Page 47 GAO-04-637 Unfunded Mandates

L24 Approving the site at Yucca 

Mountain, Nevada, for the 

development of a 

repository for the disposal 

of high-level radioactive 

waste and spent nuclear 

fuel, pursuant to the 

Nuclear Waste Policy Act 

of 1982 (Pub. L. No. 107-

200)

(Intergovernmental) Approves the placement 

of a nuclear waste site in Nevada (additional 

costs to Nevada and neighboring states could 

result from existing federal mandates).

CBO estimated costs were below threshold.

L25 Sarbanes-Oxley Act of 

2002 (Pub. L. No. 107-204)

(Intergovernmental) Allows the Public 

Company Accounting Oversight Board to 

conduct operations and maintain offices in any 

state without regard to any conflicting state law.

(Private sector) Establishes the Public 

Company Accounting Oversight Board to 

regulate the accounting industry and a 

standard-setting body to write national 

standards for accounting practices; the two 

regulatory bodies will assess fees on public 

companies to cover their costs.

(Private sector) Requires that auditors and 

audit committees of public companies comply 

with new standards.

(Private sector) Prohibits insider trades of 

stock during pension fund blackout periods if 

the stock was acquired in connection with 

service as a director or executive officer.

(Private sector) Requires pension plan 

administrators to notify plan participants, 

beneficiaries, and the insurer of employer 

securities of an impending blackout period.

(Private sector) Requires that public 

corporations make enhanced financial 

disclosures to the Securities and Exchange 

Commission.

CBO did not review intergovernmental 

provision prior to enactment because it was 

added to the bill after it was reviewed by CBO.

CBO estimated the costs of notification of 

blackout periods by pension plan 

administrators were below applicable 

thresholds, and other costs were uncertain. 

(Continued From Previous Page)

GAO ID Law

CBO’s description of potential impacts, or 

requirements on state, local, and tribal 

governments or the private sector

Reason(s) CBO did not identify one or more 

provisions as unfunded federal mandates at 

or above the costs thresholds under UMRA
Appendix II

Examples of Statutes with Impacts on 

Nonfederal Parties that Were Not Mandates 

at or Above UMRA Thresholds

Page 48 GAO-04-637 Unfunded Mandates

L26 Trade Act of 2002 (Pub. L. 

No. 107-210)

(Private Sector) Requires each land, air, or 

vessel carrier to provide by electronic 

transmission cargo manifest information in 

advance of entry into the United States or 

clearance by Customs.

(Private Sector) Increases compliance cost of 

existing requirement to provide health 

insurance for certain separated workers.

CBO estimated costs were below threshold.

L27 An Act to rename Wolf 

Trap Farm Park as ‘‘Wolf 

Trap National Park for the 

Performing Arts’’, and for 

other purposes.

(Pub. L. No. 107-219)

(Intergovernmental) Renames “Wolf Trap Farm 

Park” and requires Virginia to erect signs 

referring to the park by its new full name.

CBO estimated costs were below threshold.

L28 An act to amend the Public 

Health Service Act to 

redesignate a facility as the 

National Hansen’s Disease 

Programs Center, and for 

other purposes.

(Pub. L. No. 107-220)

(Intergovernmental) Places requirements on 

manufacturers of medical devices.

CBO estimated costs were below threshold.

L29 John F. Kennedy Center 

Plaza Authorization Act of 

2002 (Pub. L. No. 107-224)

(Intergovernmental) Allows the mayor of the 

District of Columbia to dispose of property 

without City Council approval; allows the U.S. 

Secretary of Transportation to require the 

District to reconfigure streets in the Kennedy 

Center construction area; may require the 

District to transfer air or property rights to the 

construction project.

CBO estimated costs were below threshold.

L30 Foreign Relations 

Authorization Act, Fiscal 

Year 2003 (Pub. L. No. 

107-228)

(Private Sector) Requires exporters or their 

agents not covered under current regulations to 

file their export declarations through the 

Automated Export System.

CBO estimated costs were below threshold.

L31 National Construction 

Safety Team Act (Pub. L. 

No. 107-231)

(Private Sector) Requires private-sector 

entities, if subpoenaed, to provide testimony 

and evidence related to matters the National 

Construction Safety Team would be 

empowered to investigate.

CBO estimated costs were below threshold.

(Continued From Previous Page)

GAO ID Law

CBO’s description of potential impacts, or 

requirements on state, local, and tribal 

governments or the private sector

Reason(s) CBO did not identify one or more 

provisions as unfunded federal mandates at 

or above the costs thresholds under UMRA
Appendix II

Examples of Statutes with Impacts on 

Nonfederal Parties that Were Not Mandates 

at or Above UMRA Thresholds

Page 49 GAO-04-637 Unfunded Mandates

L32 Medical Device User Fee 

and Modernization Act of 

2002 (Pub. L. No. 107-250)

(Private Sector) Gives the Secretary the 

authority to assess and collect user fees from 

manufacturers of medical devices to defray the 

cost to FDA of reviewing applications for 

approval to market those devices.

(Private Sector) Requires manufacturers of 

medical devices to comply with certain labeling 

and notification conventions and to submit their 

registrations electronically.

CBO stated some costs were below applicable 

thresholds and others were uncertain. 

L33 Health Care Safety Net 

Amendments of 2002 

(Pub. L. No. 107-251)

(Intergovernmental) Preempts state statutes of 

limitations in cases in which the beneficiary of a 

medical loan fails to make payments.

States have flexibility to offset costs.

CBO estimated costs were below threshold. 

L34 Help America Vote Act of 

2002 (Pub. L. No. 107-252)

(Intergovernmental) Places a number of new 

requirements on state and local governments, 

specifically setting new standards for voting 

systems used in federal elections, requiring 

each state to develop a computerized database 

of all registered voters in the state, and 

requiring local election jurisdictions to develop 

procedures for provisional voting. 

The act also authorizes grant programs to 

reimburse state and local governments for 

costs incurred in complying with these 

requirements. 

Some provisions excluded because they 

enforced the constitutional rights of individuals. 

For some other provisions, CBO stated that 

any costs to state, local, or tribal governments 

would be incurred voluntarily from participating 

in grant programs. 

L35 21st Century Department 

of Justice Appropriations 

Authorization Act (Pub. L. 

No. 107-273)

(Intergovernmental) Eliminates federal interest 

payments to states related to costs for 

incarcerating illegal aliens.

(Private Sector) Limits access to body armor by 

violent felons.

(Private Sector) Waives copyright infringement 

rules for educators who teach long-distance 

classes over the Internet and thus restricts 

copyright owners from receiving compensation 

for such use by educators.

(Private Sector) Provides that contract disputes 

between motor vehicle manufacturers and 

dealers can be resolved by arbitration only after 

both parties agree to arbitration as a means of 

settling the dispute.

CBO estimated costs were below threshold.

(Continued From Previous Page)

GAO ID Law

CBO’s description of potential impacts, or 

requirements on state, local, and tribal 

governments or the private sector

Reason(s) CBO did not identify one or more 

provisions as unfunded federal mandates at 

or above the costs thresholds under UMRA
Appendix II

Examples of Statutes with Impacts on 

Nonfederal Parties that Were Not Mandates 

at or Above UMRA Thresholds

Page 50 GAO-04-637 Unfunded Mandates

L36 Homeland Security Act of 

2002

(Pub. L. No. 107-296)

(Intergovernmental) Preempts state or local 

laws to the extent that they require disclosure 

or information records.

(Intergovernmental) Preempts state liability 

laws in cases involving alleged negligence 

related to smallpox vaccines.

(Private sector) Requires that air carriers 

provide additional training to flight and cabin 

crews. 

(Private sector) Requires airline carriers to 

provide flight attendants with a method of 

communicating with pilots.

(Private sector) Requires manufacturers and 

importers of explosive materials to furnish 

samples to the Bureau of Alcohol, Tobacco, 

and Firearms; imposes new licensing and 

reporting requirements for people handling 

explosive materials.

CBO did not review a private sector provision 

prior to enactment because it was added to the 

bill after it was reviewed by CBO.

CBO stated some costs were below applicable 

thresholds and others were uncertain. 

(Continued From Previous Page)

GAO ID Law

CBO’s description of potential impacts, or 

requirements on state, local, and tribal 

governments or the private sector

Reason(s) CBO did not identify one or more 

provisions as unfunded federal mandates at 

or above the costs thresholds under UMRA
Appendix II

Examples of Statutes with Impacts on 

Nonfederal Parties that Were Not Mandates 

at or Above UMRA Thresholds

Page 51 GAO-04-637 Unfunded Mandates

L37 Terrorism Risk Insurance 

Act of 2002

(Pub. L. No. 107-297)

(Private sector) Requires that insurers and 

policyholders of commercial property and 

casualty insurance pay assessments and 

surcharges for repayment of the federal 

financial assistance provided in connection with 

acts of terrorism.

(Private sector) Requires insurers of 

commercial property to offer terrorism 

insurance.

(Intergovernmental) Nullifies any terrorism 

exclusion in a contract for property and 

casualty insurance; that nullification preempts 

any previous state approval of insurance with 

terrorism exclusions.

(Intergovernmental) Preempts any state 

definition of an “act of terrorism” that is 

inconsistent with the federal definition; requires 

insurers to disclose books and records to the 

Secretary of the Treasury, notwithstanding 

state laws to the contrary.

(Intergovernmental) Creates an exclusive 

federal cause of action for losses resulting from 

an act of terrorism; preempts all state causes of 

action.

CBO estimated some costs were below 

thresholds, while others were uncertain. The 

mandate requiring insurers to offer terrorism 

insurance was added after CBO review, and 

thus its costs were not estimated. After 

enactment, CBO stated that the costs of this 

mandate were uncertain. 

L38 Real Interstate Driver 

Equity Act of 2002 (Pub. L. 

No. 107-298)

(Intergovernmental) Exempts ground 

transportation carriers that provide prearranged 

service from state licensing and fee 

requirements as long as the carriers are 

properly licensed in their home states and meet 

federal interstate transportation requirements. 

CBO estimated costs were below threshold.

L39 Intelligence Authorization 

Act for Fiscal Year 2003 

(Pub. L. No. 107-306)

(Intergovernmental and Private Sector) 

Requires public and private sector entities, if 

subpoenaed, to provide testimony and 

evidence to the National Commission on 

Terrorist Attacks upon the United States. 

(Intergovernmental) Preempts state and local 

laws that would require a government body to 

disclose information.

CBO estimated costs were below threshold.

(Continued From Previous Page)

GAO ID Law

CBO’s description of potential impacts, or 

requirements on state, local, and tribal 

governments or the private sector

Reason(s) CBO did not identify one or more 

provisions as unfunded federal mandates at 

or above the costs thresholds under UMRA
Appendix II

Examples of Statutes with Impacts on 

Nonfederal Parties that Were Not Mandates 

at or Above UMRA Thresholds

Page 52 GAO-04-637 Unfunded Mandates

L40 An act to amend the 

Consumer Product Safety 

Act to provide that lowspeed electric bicycles are 

consumer products subject 

to such act (Pub. L. No. 

107-319)

(Intergovernmental) Preempts state laws and 

regulations governing low-speed electric 

bicycles that are more stringent than 

regulations established by the Consumer 

Product Safety Commission.

CBO estimated costs were below threshold.

L41 Veterans Benefits Act of 

2002 (Pub. L. No. 107-330)

(Intergovernmental and Private Sector) 

Establishes a temporary exemption of some 

National Guard members who are performing 

homeland security activities from certain 

financial obligations.

CBO stated some costs were below applicable 

thresholds and others were uncertain. 

L42 Indian Financing 

Amendments Act ‘of 2002 

(Pub. L. No. 107-331) 

(Intergovernmental) Extinguishes outstanding 

legal claims of the Cherokee, Choctaw, and 

Chickasaw nations.

(Private Sector) Prohibits anyone from 

condemning certain land owned in fee by the 

Pechanga band until the Secretary of the 

Interior renders a final decision on the band’s 

pending application to transfer that land into a 

trust and until final decisions have been made 

about all appeals relating to that application.

(Private Sector) Limits the fees payable to 

attorneys under contract with the Cherokee, 

Choctaw, and Chickasaw nations to 10 percent 

of the funds allocated by the government to 

each of those nations.

CBO estimated costs were below threshold.

(Continued From Previous Page)

GAO ID Law

CBO’s description of potential impacts, or 

requirements on state, local, and tribal 

governments or the private sector

Reason(s) CBO did not identify one or more 

provisions as unfunded federal mandates at 

or above the costs thresholds under UMRA
Appendix II

Examples of Statutes with Impacts on 

Nonfederal Parties that Were Not Mandates 

at or Above UMRA Thresholds

Page 53 GAO-04-637 Unfunded Mandates

Source: CBO.

L43 Pipeline Safety 

Improvement Act of 2002 

(Pub. L. No. 107-355)

(Intergovernmental) Requires operators of 

natural gas pipelines to adhere to minimum 

safety standards, provide whistleblower 

protection for employees, create an employee 

qualification program, honor orders by the 

Department of Transportation to correct unsafe 

conditions, conduct facility risk analysis, 

develop an integrity management program, 

create a terrorism security plan, and provide 

mapping data.

(Private Sector) Requires operators of natural 

gas and hazardous-liquid pipelines to adhere to 

minimum safety standards, provide 

whistleblower protection for employees, create 

an employee qualification program, honor 

orders by the Department of Transportation to 

correct unsafe conditions, conduct facility risk 

analysis, develop an integrity management 

program, create a terrorism security plan, and 

provide mapping data.

CBO estimated costs were below threshold.

(Continued From Previous Page)

GAO ID Law

CBO’s description of potential impacts, or 

requirements on state, local, and tribal 

governments or the private sector

Reason(s) CBO did not identify one or more 

provisions as unfunded federal mandates at 

or above the costs thresholds under UMRA
Page 54 GAO-04-637 Unfunded Mandates

Appendix III

Final Rules with Federal Mandates under 

UMRA ApendxiI

The following table presents information on each of the nine final rules 

published by federal regulatory agencies during 2001 and 2002 that the 

agencies identified as federal mandates under UMRA (see table 6). For 

each rule, we provide (1) GAO’s identification number for the rule, (2) the 

title of the rule and its date of publication in the Federal Register, (3) the 

agency that published the rule, (4) summary information about the 

potential costs or other negative financial effects of the rule on affected 

nonfederal parties, and (5) the agency’s statement, as it appeared in the 

Federal Register notice, regarding the applicability of UMRA.

Table 6: Final Rules Published in 2001 and 2002 that Agencies Identified as Containing Federal Mandates Under UMRA

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA

R8 National Emission 

Standards for 

Hazardous Air 

Pollutants for Chemical 

Recovery Combustion 

Sources at Kraft, Soda, 

Sulfite, and StandAlone Semichemical 

Pulp Mills

(Jan. 12, 2001)

Environmental 

Protection 

Agency (EPA)

Required chemical recovery combustion 

sources to meet standards reflecting the 

application of maximum achievable control 

technology (MACT) to control hazardous air 

pollutants emissions from these sources.

EPA estimated that the pulp and paper 

industry would incur total capital costs of 

control for this rule of $240 million (1997$) 

under the final rule. EPA projected 

annualized compliance expenditures of $30 

million (1997$).

“The EPA has determined that this rule 

(in conjunction with the MACT I and 

MACT III rules and the effluent guidelines 

recently promulgated for the pulp and 

paper industry) contains a Federal 

mandate that may result in estimated 

costs of $100 million or more to either 

State, local, or tribal governments, in the 

aggregate, or to the private sector in any 

1 year.” 

R9 Energy Conservation 

Program for Consumer 

Products: Clothes 

Washer Energy 

Conservation 

Standards

(Jan. 12, 2001)

Department of 

Energy

Amended existing energy conservation 

standards for standard-size and compact 

clothes washers as well as making minor 

amendments to the test procedure for 

measuring the energy efficiency of clothes 

washers. 

To meet the 2004 standard in this rule, the 

department estimated that the price of a 

washer would increase $53, offset by an 

annual savings of about $15 on utility bills 

and, to meet the 2007 standard, the price 

would increase $249, offset by an annual 

savings of about $48. The estimated 

economic impact on manufacturers was a 

cumulative net present value loss of 

between $421.1 million and $528.4 million.

“Today’s final rule may impose 

expenditures of $100 million or more on 

the private sector. It does not contain a 

Federal intergovernmental mandate.”
Appendix III

Final Rules with Federal Mandates under 

UMRA

Page 55 GAO-04-637 Unfunded Mandates

R12 Energy Conservation 

Program for Consumer 

Products: Energy 

Conservation 

Standards for Water 

Heaters

(Jan. 17, 2001)

Department of 

Energy

Amended the existing energy conservation 

standards for water heaters. 

The department estimated that the total 

average increased cost to a consumer for an 

electric and gas water heater would be $105 

and $118, respectively. The department’s 

manufacturer impact analysis noted that 

energy efficiency standards could result in 

losses of industry net present value from 

about $8 million to $57 million, while 

requiring investments of $33 million to $229 

million.

“Today’s Final Rule may impose 

expenditures of $100 million or more in a 

year in the private sector. It does not 

contain a Federal intergovernmental 

mandate.”

R14 Control of Air Pollution 

from New Motor 

Vehicles: Heavy-Duty 

Engine and Vehicle 

Standards and 

Highway Diesel Fuel 

Sulfur Control 

Requirements

(Jan. 18, 2001)

Environmental 

Protection 

Agency

Established a national control program to 

regulate the heavy-duty vehicle and its fuel 

as a single system. Set new emission 

standards applicable to heavy-duty highway 

engines and vehicles, to begin to take effect 

in model year 2007. Set new standard to 

reduce the level of sulfur in highway diesel 

fuel by mid-2006.

EPA estimated annual costs starting out at 

less than $1.0 billion in 2006 and increasing 

during the initial years to about $3.6 billion in 

2010. Thereafter, total annual costs are 

projected to continue increasing due to the 

effects of projected growth in engine sales 

and fuel consumption.

“This rule contains no federal mandates 

for state, local, or tribal governments as 

defined by the provisions of Title II of the 

UMRA. The rule imposes no enforceable 

duties on any of these governmental 

entities. Nothing in this rule will 

significantly or uniquely affect small 

governments.

EPA has determined that this rule 

contains federal mandates that may 

result in expenditures of more than $100 

million to the private sector in any single 

year. EPA considered and evaluated a 

wide range of regulatory alternatives 

before arriving at the program finalized 

today. EPA believes that today’s final rule 

represents the least costly, most cost 

effective approach to achieve the air 

quality goals of the rule.”

R21 Energy Conservation 

Program for Consumer 

Products: Central Air 

Conditioners and Heat 

Pumps Energy 

Conservation 

Standards

(Jan. 22, 2001)

Department of 

Energy

Amended the existing energy conservation 

standards for central air conditioners and 

heat pumps. 

To meet the 2006 standard in this rule for air 

conditioners, the department estimated that 

the installed price of a typical air conditioner 

would increase $335, offset by annual 

energy savings of about $42 on utility bills. 

To meet the 2006 standard for heat pumps, 

the installed price of a typical heat pump 

would increase $332, offset by annual 

energy savings of about $70. The decrease 

in the net present value of the air 

conditioning and heat pump manufacturing 

industry is expected to be $300 million. 

“Today’s final rule may impose 

expenditures of $100 million or more on 

the private sector. It does not contain a 

Federal intergovernmental mandate.”

(Continued From Previous Page)

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA
Appendix III

Final Rules with Federal Mandates under 

UMRA

Page 56 GAO-04-637 Unfunded Mandates

R22 National Primary 

Drinking Water 

Regulations; Arsenic 

and Clarifications to 

Compliance and New 

Source Contaminants 

Monitoring

(Jan. 22, 2001)

Environmental 

Protection 

Agency

Among other provisions, established an 

enforceable Maximum Contaminant Level 

for arsenic of 0.01 milligrams per liter, 

applicable to nontransient, noncommunity 

water systems and to community water 

systems. EPA’s analysis identified both 

publicly owned and privately owned water 

systems that would be regulated under the 

arsenic rule. 

EPA estimated that this rule would have a 

total annualized cost of approximately $181 

million. 

“EPA has determined that this rule 

contains a Federal mandate that may 

result in expenditures of $100 million or 

more for State, Tribal, and local 

governments, in the aggregate, or the 

private sector in any one year.” 

R87 Energy Conservation 

Program for Consumer 

Products; Central Air 

Conditioners and Heat 

Pumps Energy 

Conservation 

Standards

(May 23, 2002)

Department of 

Energy

Amended existing energy conservation 

standards for central air conditioners and 

heat pumps and withdrew the final rule 

published on January 22, 2001, [ID 21] that 

would have established even higher 

standards. 

To meet the 2006 standard in this rule for air 

conditioners, the department estimated that 

the installed price of a typical air conditioner 

would increase $213, offset by annual 

energy savings of about $31 on utility bills. 

To meet the 2006 standard for heat pumps, 

the installed price of a typical heat pump 

would increase $144, offset by annual 

energy savings of about $50. The decrease 

in the net present value of the air 

conditioning and heat pump manufacturing 

industry is expected to be $159 million.

“Today’s rule will impose expenditures of 

$100 million or more on the private 

sector. It does not contain a Federal 

intergovernmental mandate.”

(Continued From Previous Page)

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA
Appendix III

Final Rules with Federal Mandates under 

UMRA

Page 57 GAO-04-637 Unfunded Mandates

Source: GAO.

R88 Federal Motor Vehicle 

Safety Standards; Tire 

Pressure Monitoring 

Systems; Controls and 

Displays

(June 5, 2002)

(In August 2003, the 

U.S. Court of Appeals 

held that this rule was 

contrary to the intent of 

the tire safety 

legislation and arbitrary 

and capricious under 

the Administrative 

Procedure Act (see 

Public Citizen, Inc. v. 

Mineta, 340 F.3d 39 

(2003)). However, 

because DOT identified 

the rule as a federal 

mandate when 

originally published in 

2002, we are including 

it in our list of rules 

identified as mandates 

under UMRA.)

Department of 

Transportation

Established a new Federal Motor Vehicle 

Safety Standard that requires the installation 

of tire pressure monitoring systems that 

warn the driver when a tire is significantly 

under-inflated. The rule presented two 

compliance options, (1) a four tires, 25 

percent under-inflation option and (2) a one 

tire, 30 percent under-inflation option. 

The agency estimated that, under the first 

option, compliance with this rule would cost 

about $771 million per year, and under the 

second option would cost about $533 million 

per year. 

“This final rule will not result in the 

expenditure by State, local, or tribal 

governments, in the aggregate, of more 

than $100 million annually, but it will 

result in the expenditure of that 

magnitude by vehicle manufacturers 

and/or their suppliers.”

R119 Control of Emissions 

From Nonroad Large 

Spark-Ignition Engines, 

and Recreational 

Engines (Marine and 

Land-Based)

(Nov. 8, 2002)

Environmental 

Protection 

Agency

Adopted emission standards for several 

groups of nonroad engines that have not 

been subject to EPA’s emission standards.

EPA estimated that, annually, the cost to 

manufacturers would be approximately $210 

million.

“This rule contains no federal mandates 

for state, local, or tribal governments as 

defined by the provisions of Title II of the 

UMRA. The rule imposes no enforceable 

duties on any of these governmental 

entities. Nothing in this rule would 

significantly or uniquely affect small 

governments. EPA has determined that 

this rule contains federal mandates that 

may result in expenditures of more than 

$100 million to the private sector in any 

single year.”

(Continued From Previous Page)

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA
Page 58 GAO-04-637 Unfunded Mandates

Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA ApendxiIV

The following table provides information on 65 major or economically 

significant final rules published during that 2001 and 2002 that did not 

trigger UMRA but that would result in at least some costs or negative 

financial effects on state, local, and tribal governments or the private sector 

(see table 7). The table displays the various reasons that agencies cited or 

could have cited to explain why the rules did not trigger UMRA. Code “A” 

identifies reasons the agencies cited, and code “O” identifies other reasons 

that could have applied. Note that only 11 of the 14 possible reasons under 

UMRA were applicable to any of these rules.1

1

 The reasons that were not applicable to any of the 65 rules included: (1) enforcing the 

constitutional rights of individuals, (2) providing emergency assistance or relief at the 

request of any state, local, or tribal government, and (3) relating to the old age, survivors, 

and disability insurance program under the Social Security Act and the Internal Revenue 

Code.
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 59 GAO-04-637 Unfunded Mandates
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 60 GAO-04-637 Unfunded Mandates

Table 7: Reasons 65 Final Rules with Significant Effects on Nonfederal Parties Did Not Trigger UMRA

GAO ID 

Rule, date of publication, and 

publishing agency

Enforces rights

prohibiting

discrimination

Requires compliance

with accounting and

auditing procedures

Necessary for

national security

Associated with

emergency

legislation

R1 Lead; Identification of Dangerous 

Levels of Lead

(Jan. 5, 2001)

Environmental Protection Agency 

(EPA)

R2 Interim Final Rules for 

Nondiscrimination in Health 

Coverage in the Group Market

(Jan. 8, 2001)

Departments of the Treasury, Labor 

(DOL), and Health and Human 

Services (HHS)

O

R4 Retained Water in Raw Meat and 

Poultry Products; Poultry Chilling 

Requirements

(Jan. 9, 2001)

Department of Agriculture (USDA)

R5 Medicaid Program; Change in 

Application of Federal Financial 

Participation Limits

(Jan. 11, 2001)

HHS

R6 State Child Health; Implementing 

Regulations for the State Children's 

Health Insurance Program

(Jan. 11, 2001)

HHS

R7 Promotion of Competitive Networks 

in Local Telecommunications 

Markets

(Jan. 11, 2001)

Federal Communications 

Commission (FCC)

R10 Special Areas; Roadless Area 

Conservation

(Jan. 12, 2001)

USDA
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 61 GAO-04-637 Unfunded Mandates

y

No notice of

proposed

rulemaking

No expenditure of

$100 million or

more in any 1 year

Otherwise

prohibited by

law

Independent

regulatory

agency

No

enforceable

duty

Duty is a condition

of federal financial

assistance

Duty arises from

participation in

voluntary federal

program

A A

A

O AO

A A

O

A
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 62 GAO-04-637 Unfunded Mandates

R11 Medicaid Program; Revision to 

Medicaid Upper Payment Limit 

Requirements for Hospital Services, 

Nursing Facility Services, 

Intermediate Care Facility Services 

for the Mentally Retarded, and Clinic 

Services

(Jan. 12, 2001)

HHS

R13 Food Stamp Program; Personal 

Responsibility Provisions of the 

Personal Responsibility and Work 

Opportunity Reconciliation Act of 

1996

(Jan. 17, 2001)

USDA

R16 Safety Standards for Steel Erection

(Jan. 18, 2001)

DOL

R17 Medicaid Program; Medicaid 

Managed Care

(Jan. 19, 2001)

HHS

R18 Hazard Analysis and Critical Control 

Point (HAACP); Procedures for the 

Safe and Sanitary Processing and 

Importing of Juice

(Jan. 19, 2001)

HHS

R19 Occupational Injury and Illness 

Recording and Reporting 

Requirements

(Jan. 19, 2001)

DOL

(Continued From Previous Page)

GAO ID 

Rule, date of publication, and 

publishing agency

Enforces rights

prohibiting

discrimination

Requires compliance

with accounting and

auditing procedures

Necessary for

national security

Associated with

emergency

legislation
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 63 GAO-04-637 Unfunded Mandates

A

AO O

A O

A AO

A

O O

No notice of

proposed

rulemaking

No expenditure of

$100 million or

more in any 1 year

Otherwise

prohibited by

law

Independent

regulatory

agency

No

enforceable

duty

Duty is a condition

of federal financial

assistance

Duty arises from

participation in

voluntary federal

program
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 64 GAO-04-637 Unfunded Mandates

R20 Fisheries of the Exclusive Economic 

Zone Off Alaska; Steller Sea Lion 

Protection Measures for the 

Groundfish Fisheries Off Alaska; 

Final 2001 

Harvest Specifications and 

Associated Management Measures 

for the 

Groundfish Fisheries Off Alaska

(Jan. 22, 2001)

Department of Commerce 

R23 Disclosure of Mutual Fund After-Tax 

Returns

(Feb. 5, 2001)

Securities and Exchange 

Commission (SEC)

R24 Civilian Health and Medical Program 

of the Uniformed Services 

(CHAMPUS)/TRICARE; Partial 

Implementation of Pharmacy 

Benefits Program; Implementation 

of National Defense Authorization 

Act Medical Benefits for Fiscal Year 

2001

(Feb. 9, 2001)

Department of Defense (DOD)

R28 2000-Crop Disaster Program

(Mar. 21, 2001)

USDA

R30 Assistance to Firefighters Grant 

Program

(Mar. 29, 2001)

Federal Emergency Management 

Agency (FEMA)

R31 Adjustment of Status To That 

Person Admitted for Permanent 

Residence; Temporary Removal of 

Certain Restrictions of Eligibility

(Mar. 26, 2001)

Department of Justice (DOJ)

(Continued From Previous Page)

GAO ID 

Rule, date of publication, and 

publishing agency

Enforces rights

prohibiting

discrimination

Requires compliance

with accounting and

auditing procedures

Necessary for

national security

Associated with

emergency

legislation
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 65 GAO-04-637 Unfunded Mandates

O O

O O

O

O AO O

O O A A

O A O

y

No notice of

proposed

rulemaking

No expenditure of

$100 million or

more in any 1 year

Otherwise

prohibited by

law

Independent

regulatory

agency

No

enforceable

duty

Duty is a condition

of federal financial

assistance

Duty arises from

participation in

voluntary federal

program
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 66 GAO-04-637 Unfunded Mandates

R33 Light Truck Average Fuel Economy 

Standard, Model Year 2003

(Apr. 2, 2001)

Department of Transportation (DOT)

R34 Federal Acquisition Regulations; 

Electronic and Information 

Technology 

Accessibility

(Apr. 25, 2001)

DOD, General Services 

Administration (GSA), and National 

Aeronautics and Space 

Administration (NASA)

O

R35 Safety Incentive Grants for Use of 

Seat Belts—Allocations Based on 

State Seat Belt Use Rates

(Apr. 26, 2001)

DOT 

R39 Adjustment of Status Under Legal 

Immigration Family Equity (LIFE) 

Act Legalization Provisions and 

LIFE Act Amendments Family Unity 

Provisions

(June 1, 2001)

DOJ

R41 Revision of Fee Schedules; Fee 

Recovery for FY 2001

(June 14, 2001)

Nuclear Regulatory Commission 

(NRC)

R42 Supplemental Property Acquisition 

and Elevation Assistance

(June 15, 2001)

FEMA 

R44 Assessment and Collection of 

Regulatory Fees for Fiscal Year 

2001

(July 11, 2001)

FCC

(Continued From Previous Page)

GAO ID 

Rule, date of publication, and 

publishing agency

Enforces rights

prohibiting

discrimination

Requires compliance

with accounting and

auditing procedures

Necessary for

national security

Associated with

emergency

legislation
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 67 GAO-04-637 Unfunded Mandates

O A

O

O A O A

O A O

O

O A A

O

No notice of

proposed

rulemaking

No expenditure of

$100 million or

more in any 1 year

Otherwise

prohibited by

law

Independent

regulatory

agency

No

enforceable

duty

Duty is a condition

of federal financial

assistance

Duty arises from

participation in

voluntary federal

program
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 68 GAO-04-637 Unfunded Mandates

R46 Medicare Program; Prospective 

Payment System and Consolidated 

Billing for Skilled Nursing FacilitiesUpdate; Final Rule

(July 31, 2001)

HHS

R49 Medicare Program; Prospective 

Payment System for Inpatient 

Rehabilitation Facilities

(Aug. 7, 2001)

HHS

R54 Risk-Based Capital

(Sept. 13, 2001)

Department of Housing and Urban 

Development

R58 Regulations for Air Carrier 

Guarantee Loan Program Under 

Section 101(a)(1) of the Air 

Transportation Safety and System 

Stabilization Act

(Oct. 12, 2001)

Office of Management and Budget 

R60 Medicare Program; Monthly 

Actuarial Rates and Monthly 

Supplementary Medical Insurance 

Premium Rate Beginning January 1, 

2002

(Oct. 26, 2001)

HHS

R61 Medicare Program; Inpatient 

Hospital Deductible and Hospital 

and Extended Care Services 

Coinsurance Amounts for 2002

(Oct. 26, 2001)

HHS

R62 Procedures for Compensation of Air 

Carriers

(Oct. 29, 2001)

DOT 

(Continued From Previous Page)

GAO ID 

Rule, date of publication, and 

publishing agency

Enforces rights

prohibiting

discrimination

Requires compliance

with accounting and

auditing procedures

Necessary for

national security

Associated with

emergency

legislation
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 69 GAO-04-637 Unfunded Mandates

A

OA A

O A

O A O O

O O

O A O

O O O O

No notice of

proposed

rulemaking

No expenditure of

$100 million or

more in any 1 year

Otherwise

prohibited by

law

Independent

regulatory

agency

No

enforceable

duty

Duty is a condition

of federal financial

assistance

Duty arises from

participation in

voluntary federal

program
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 70 GAO-04-637 Unfunded Mandates

R65 Books and Records Requirements 

for Brokers and Dealers Under the 

Securities Exchange Act of 1934

(Nov. 2, 2001)

SEC

R67 Copayments for Medications

(Dec. 6, 2001)

Department of Veterans Affairs (VA)

R68 Broadcast Services; Digital 

Television

(Dec. 18, 2001)

FCC

R69 September 11th Victim 

Compensation Fund of 2001

(Dec. 21, 2001)

DOJ

R70 Adjustment of Certain Fees of the 

Immigration Examinations Fee 

Account

(Dec. 21, 2001)

DOJ

R73 Medicaid Program; Modification of 

the Medicaid Upper Payment 

Limit for Non-State GovernmentOwned or Operated Hospitals

(Jan. 18, 2002)

HHS

R75 Class Exemption for Cross-Trades 

of Securities by Index and ModelDriven Funds

(Feb. 12, 2002)

DOL

R76 Aviation Security Infrastructure Fees

(Feb. 20, 2002)

DOT

O

(Continued From Previous Page)

GAO ID 

Rule, date of publication, and 

publishing agency

Enforces rights

prohibiting

discrimination

Requires compliance

with accounting and

auditing procedures

Necessary for

national security

Associated with

emergency

legislation
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 71 GAO-04-637 Unfunded Mandates

O O

A

O

O A O O

A O

A O

O

A

No notice of

proposed

rulemaking

No expenditure of

$100 million or

more in any 1 year

Otherwise

prohibited by

law

Independent

regulatory

agency

No

enforceable

duty

Duty is a condition

of federal financial

assistance

Duty arises from

participation in

voluntary federal

program
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 72 GAO-04-637 Unfunded Mandates

R77 Civil Aviation Security Rules

(Feb. 22, 2002)

DOT

O O

R78 Security Programs for Aircraft 

12,500 Pounds or More

(Feb. 22, 2002)

DOT

O O

R79 Assistance to Firefighters Grant 

Program

(Feb. 27, 2002)

FEMA 

R80 September 11th Victim 

Compensation Fund of 2001

(Mar. 13, 2002)

DOJ

R81 Noninsured Crop Disaster 

Assistance Program

(Mar. 19, 2002)

USDA

R83 Civilian Health and Medical Program 

of the Uniformed Services 

(CHAMPUS)/ TRICARE; Partial 

Implementation of Pharmacy 

Benefits Program; Implementation 

of National Defense Authorization 

Act for Fiscal Year 2001

(Apr. 3, 2002)

DOD

R84 Light Truck Average Fuel Economy 

Standard, Model Year 2004

(Apr. 4, 2002)

DOT

R85 New Entrant Safety Assurance 

Process

(May 13, 2002)

DOT

(Continued From Previous Page)

GAO ID 

Rule, date of publication, and 

publishing agency

Enforces rights

prohibiting

discrimination

Requires compliance

with accounting and

auditing procedures

Necessary for

national security

Associated with

emergency

legislation
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 73 GAO-04-637 Unfunded Mandates

A

A

O O A A

O A O O

OO A O O

O O O

A

O A

No notice of

proposed

rulemaking

No expenditure of

$100 million or

more in any 1 year

Otherwise

prohibited by

law

Independent

regulatory

agency

No

enforceable

duty

Duty is a condition

of federal financial

assistance

Duty arises from

participation in

voluntary federal

program
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 74 GAO-04-637 Unfunded Mandates

R86 Ultra-Wideband Transmission 

Systems

(May 16, 2002)

FCC

R89 Adjustment of Status Under Legal 

Immigration Family Equity (LIFE) 

Act Legalization Provisions and 

LIFE Act Amendments Family Unity 

Provisions

(June 4, 2002)

DOJ

R90 TRICARE; Sub-Acute Care 

Program; Uniform Skilled Nursing 

Facility Benefit; Home Health Care 

Benefit; Adopting Medicare Payment 

Methods for Skilled Nursing 

Facilities and Home Health Care 

Providers

(June 13, 2002)

DOD

R91 Medicaid Program; Medicaid 

Managed Care: New Provisions

(June 14, 2002)

HHS

R93 Revision of Fee Schedules; Fee 

Recovery for FY 2002

(June 24, 2002)

NRC

(Continued From Previous Page)

GAO ID 

Rule, date of publication, and 

publishing agency

Enforces rights

prohibiting

discrimination

Requires compliance

with accounting and

auditing procedures

Necessary for

national security

Associated with

emergency

legislation
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 75 GAO-04-637 Unfunded Mandates

O

O A O

O OO

A O

O

No notice of

proposed

rulemaking

No expenditure of

$100 million or

more in any 1 year

Otherwise

prohibited by

law

Independent

regulatory

agency

No

enforceable

duty

Duty is a condition

of federal financial

assistance

Duty arises from

participation in

voluntary federal

program
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 76 GAO-04-637 Unfunded Mandates

R94 Order To Permit Operation of NGSO 

FSS Systems Co-Frequency With 

GSO and Terrestrial Systems in the 

Ku-Band Frequency Range; 

Authorize Subsidiary Terrestrial Use 

of the 12.2-12.7 GHz Band by Direct 

Broadcast Satellite Licensees and 

Their Affiliates; and in Re 

Applications of Broadwave USA, 

PDC Broadband Corporation, and 

Satellite Receivers, Ltd. in the 

[12.2]-12.7 GHz Band

(June 26, 2002)

FCC

R96 Assessment and Collection of 

Regulatory Fees For Fiscal Year 

2002

(July 12, 2002)

FCC

R97 Medicare Program; Prospective 

Payment System and Consolidated 

Billing for Skilled Nursing Facilities—

Update; Notice

(July 31, 2002)

HHS

R98 Medicare Program; Changes to the 

Hospital Inpatient Prospective 

Payment Systems and Fiscal Year 

2003 Rates

(Aug. 1, 2002)

HHS

R100 Standards for Privacy of Individually 

Identifiable Health Information

(Aug. 14, 2002)

HHS

R105 Medicare Program; MedicareEndorsed Prescription Drug Card 

Assistance Initiative

(Sept. 4, 2002)

HHS

(Continued From Previous Page)

GAO ID 

Rule, date of publication, and 

publishing agency

Enforces rights

prohibiting

discrimination

Requires compliance

with accounting and

auditing procedures

Necessary for

national security

Associated with

emergency

legislation
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 77 GAO-04-637 Unfunded Mandates

O O

O

O A

O

A

O

A A

No notice of

proposed

rulemaking

No expenditure of

$100 million or

more in any 1 year

Otherwise

prohibited by

law

Independent

regulatory

agency

No

enforceable

duty

Duty is a condition

of federal financial

assistance

Duty arises from

participation in

voluntary federal

program
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 78 GAO-04-637 Unfunded Mandates

Source: GAO

R106 Certification of Disclosure in 

Companies' Quarterly and Annual 

Reports

(Sept. 9, 2002)

SEC

R107 Acceleration of Periodic Report 

Filing Dates and Disclosure 

Concerning Web Site Access to 

Reports

(Sept. 16, 2002)

SEC

R111 Disaster Assistance; Federal 

Assistance to Individuals and 

Households

(Sept. 30, 2002)

FEMA

O

R115 Medicare Program; Monthly 

Actuarial Rates and Monthly 

Supplementary Medical Insurance 

Premium Rate Beginning January 1, 

2003

(Oct. 21, 2002)

HHS

R116 Medicare Program; Inpatient 

Hospital Deductible and Hospital 

and Extended Care Services 

Coinsurance Amounts for 2003

(Oct. 21, 2002)

HHS

Total number of rules in which 

agencies cited the reason

Total number of rules in which 

agencies could also have cited 

the reason

2 13 2

(Continued From Previous Page)

GAO ID 

Rule, date of publication, and 

publishing agency

Enforces rights

prohibiting

discrimination

Requires compliance

with accounting and

auditing procedures

Necessary for

national security

Associated with

emergency

legislation
Appendix IV

Reasons that Selected Final Rules Did Not 

Trigger UMRA

Page 79 GAO-04-637 Unfunded Mandates

O O

O

O O

O A O

O A

3 26 3 10 3 5

25 17 2 12 1 9 21

No notice of

proposed

rulemaking

No expenditure of

$100 million or

more in any 1 year

Otherwise

prohibited by

law

Independent

regulatory

agency

No

enforceable

duty

Duty is a condition

of federal financial

assistance

Duty arises from

participation in

voluntary federal

program
Page 80 GAO-04-637 Unfunded Mandates

Appendix V

Examples of Final Rules that Did Not Trigger 

UMRA But Had Potentially Significant 

Financial Effects on Nonfederal Parties ApendxiV

The following table presents information on 29 final rules published by 

federal regulatory agencies during 2001 and 2002 that did not trigger UMRA 

but that had potentially significant costs or financial effects on state, local, 

and tribal governments or the private sector (see table 8). For each rule, 

we provide (1) GAO’s unique identification number for the rule, (2) the title 

of the rule and its date of publication in the Federal Register, (3) the agency 

that published the rule, (4) summary information about the potential costs 

or negative financial effects of the rule on affected nonfederal parties, and 

(5) the agency’s statement in the Federal Register notice, if any, regarding 

the applicability of UMRA.

Table 8: Examples of Final Rules Published in 2001 and 2002 with Provisions that Affected State, Local, and Tribal Governments 

or the Private Sector But Did Not Trigger UMRA

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA

R1 Lead; Identification of 

Dangerous Levels of 

Lead

(Jan. 5, 2001)

EPA Established standards for the identification 

of lead-based paint hazards in most pre1978 housing and child-occupied facilities, 

residential lead dust cleanup levels and 

amendments to dust and soil sampling 

requirements, and amendments to state 

program authorization requirements.

Although EPA stated that the rule “in and of 

itself” did not contain a mandate, the 

agency estimated the potential costs of 

actions that might be taken based on the 

hazard standards. Those total costs 

(estimated over a 50-year span and 

discounted at 3 percent) were $69 billion 

for the final dust and soil standards, $20 

billion for paint interventions, and $14 

billion for testing. 

“EPA has determined that this rule does 

not contain a Federal mandate that may 

result in expenditures of $100 million or 

more for State, local, and tribal 

governments, in the aggregate, or the 

private sector in any 1 year. As 

indicated previously, this rule does not, 

in and of itself, mandate any action, or 

directly impose any costs. ...The UMRA 

requirements in sections 202, 204, and 

205 do not apply to this rule, because 

this action does not contain any ‘Federal 

mandates’ or impose any ‘enforceable 

duty’ on State/Tribal, or local 

governments or on the private sector.”
Appendix V

Examples of Final Rules that Did Not Trigger 

UMRA But Had Potentially Significant 

Financial Effects on Nonfederal Parties

Page 81 GAO-04-637 Unfunded Mandates

R2 Interim Final Rules for 

Nondiscrimination in 

Health Coverage in 

the Group Market

(Jan. 8, 2001)

Departments of 

the Treasury, 

Labor, and 

Health and 

Human Services

Prohibited discrimination based on a health 

factor for group health plans and issuers of 

health insurance coverage offered in 

connection with a group health plan.

The departments estimated a one-time 

cost to health plans and insurers to 

implement this regulation of less than $19 

million. They also provided a rough 

estimate of more than $400 million annually 

for the transfer in premium and claims costs 

incurred by group health plans to provide 

coverage to individuals previously denied 

coverage or offered restricted coverage 

based on health factors. The departments 

noted that plan sponsors generally can 

pass these costs back to participants in 

health plans through changes to employee 

premiums or benefits. 

“For purposes of the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104-4), as well as Executive Order 

12875, this interim final rule does not 

include any Federal mandate that may 

result in expenditures by State, local, or 

tribal governments, nor does it include 

mandates which may impose an annual 

burden of $100 million or more on the 

private sector.”

R4 Retained Water in 

Raw Meat and Poultry 

Products; Poultry 

Chilling Requirements

(Jan. 9, 2001)

USDA Limited the amount of water retained by 

raw, single-ingredient meat and poultry 

products as a result of post-evisceration 

processing, such as carcass washing and 

chilling.

The agency estimated that the lower bound 

of costs to the private sector in the first year 

of implementation would be $110 million.

(No mention of UMRA)

R5 Medicaid Program; 

Change in Application 

of Federal Financial 

Participation Limits

(Jan. 11, 2001)

HHS Gave states additional flexibility in setting 

Medicaid eligibility requirements.

According to the agency, the rule did not 

require that states make any changes in 

their programs. However, the agency 

projected a cost to state Medicaid of 

removing federal financial participation 

limits that was estimated at $680 million 

over federal fiscal years 2001-2005.

“This final rule will have no impact on 

the private sector. The rule imposes no 

requirements on State, local or tribal 

governments. Rather, it offers State 

governments additional flexibility in 

operating their Medicaid programs, but 

does not require that they make any 

changes in their programs.”

(Continued From Previous Page)

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA
Appendix V

Examples of Final Rules that Did Not Trigger 

UMRA But Had Potentially Significant 

Financial Effects on Nonfederal Parties

Page 82 GAO-04-637 Unfunded Mandates

R10 Special Areas; 

Roadless Area 

Conservation

(Jan. 12, 2001)

USDA Established prohibitions on road 

construction, road reconstruction, and 

timber harvesting in inventoried roadless 

areas on the National Forest System's 

lands.

Among the estimated costs of the rule, the 

agency identified lost jobs and lost income 

in certain industries (timber, road 

construction, mineral resources, and 

recreation) plus other effects (e.g., lost 

coal, phosphate, and gas resources). For 

example, the agency estimated that up to 

546 direct and 3,095 total jobs related to 

limitations on exploration for and 

development of leasable minerals could be 

affected, with a potential effect on miningrelated annual income of $36.2 million less 

direct and $127.8 million less total income.

“This proposed rule does not compel the 

expenditure of $100 million or more by 

any State, local, or tribal government, or 

anyone in the private sector. Therefore, 

a statement under Section 202 of the 

Act is not required.”

R11 Medicaid Program; 

Revision to Medicaid 

Upper Payment Limit 

Requirements for 

Hospital Services, 

Nursing Facility 

Services, 

Intermediate Care 

Facility Services for 

the Mentally 

Retarded, and Clinic 

Services

(Jan. 12, 2001)

HHS Modified the Medicaid upper payment limits 

for certain health care services.

Budget projections indicated that 

potentially two-thirds of the federal share of 

enhanced payments to government 

facilities that are not state-owned or 

operated could be in excess of the upper 

payment limits imposed by this final rule. 

The limits imposed by this rule could 

therefore result in federal financial 

participation reductions of nearly $55 billion 

over the next 10 years. 

“Absent FFP [federal financial 

participation], we do not believe States 

will continue to set excessive payment 

rates for Medicaid services furnished by 

government providers. Generally, 

discontinuing an expenditure should not 

result in new costs, unless the State has 

to fund the portion of the expenditure 

that is no longer Federally funded with 

all State and local dollars. ...We do not 

believe the aggregate upper payment 

limits in this final rule have any 

unfunded mandates implications 

because they do not require any 

additional expenditures by States to 

providers under their Medicaid 

program.”

(Continued From Previous Page)

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA
Appendix V

Examples of Final Rules that Did Not Trigger 

UMRA But Had Potentially Significant 

Financial Effects on Nonfederal Parties

Page 83 GAO-04-637 Unfunded Mandates

R17 Medicaid Program; 

Medicaid Managed 

Care 

(Jan. 19, 2001)

HHS Amended the Medicaid regulations to 

implement provisions of the Balanced 

Budget Act of 1997 that, among other 

changes, allowed states greater flexibility 

by permitting them to amend their state 

plan to require certain categories of 

Medicaid beneficiaries to enroll in managed 

care entities without obtaining waivers, if 

beneficiary choice is provided.

The agency said that some of the new 

provisions "represent new requirements for 

States, MCOs, PHPs, and PCCMs but also 

provide expanded opportunities for 

participation in Medicaid managed care." 

Also, "a large number of entities, such as 

hospitals, State agencies, and MCOs will 

be affected by the implementation of these 

statutory provisions, and a substantial 

number of these entities may be required to 

make changes in their operations..." The 

state costs of the 6-month guaranteed 

eligibility option were projected to exceed 

$100 million in 2 fiscal years.

“This rule does not impose any 

mandates on State, local, or tribal 

governments, or the private sector that 

will result in an annual expenditure of 

$100 million or more.”

R20 Fisheries of the 

Exclusive Economic 

Zone Off Alaska; 

Steller Sea Lion 

Protection Measures 

for the Groundfish 

Fisheries Off Alaska; 

Final 2001 Harvest 

Specifications and 

Associated 

Management 

Measures for the 

Groundfish Fisheries 

Off Alaska

(Jan. 22, 2001)

Department of 

Commerce

Implemented Steller sea lion protection 

measures.

Under one set of assumptions, the agency 

estimated that, as a result of the reduced 

harvest in restricted times and places due 

to this rule, processing and fishing industry 

revenues could drop by between $225 

million to $401 million per year.

(No mention of UMRA)

(Continued From Previous Page)

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA
Appendix V

Examples of Final Rules that Did Not Trigger 

UMRA But Had Potentially Significant 

Financial Effects on Nonfederal Parties

Page 84 GAO-04-637 Unfunded Mandates

R31 Adjustment of Status 

To That Person 

Admitted for 

Permanent 

Residence; 

Temporary Removal 

of Certain Restrictions 

of Eligibility

(Mar. 26, 2001)

DOJ Amended regulations governing eligibility 

for adjustment of status under section 

245(i) of the Immigration and Nationality 

Act to conform the regulations to existing 

policy and procedures and to remove 

language that had been superseded by 

subsequent legislation.

DOJ estimated that the effect on the 

economy "directly associated with the 

expected increase in the number of 

applications for adjustment of status...with 

the required $1,000 penalty fee and other 

associated applications" would be about 

$178.3 million in 2001, $99.2 million in 

2002, and $91.9 million in 2003.

“This rule will not result in the 

expenditure by State, local and tribal 

governments, in the aggregate, or the 

private sector, of $100 million or more in 

1 year, and it will not significantly or 

uniquely affect small governments. 

Therefore, no actions were deemed 

necessary under the provisions of the 

Unfunded Mandates Reform Act of 

1995.”

R34 Federal Acquisition 

Regulations; 

Electronic and 

Information 

Technology 

Accessibility

(April 25, 2001)

DOD, GSA, 

NASA

Amended the Federal Acquisition 

Regulations to incorporate standards for 

electronic and information technology (EIT) 

to ensure that EIT allows those with 

disabilities to have access and use of 

information comparable to that of other 

federal employees (with the standards 

applying to federal contracts awarded on or 

after the effective date of this final rule and 

to indefinite-quantity contract delivery 

orders or task orders issued on or after the 

effective date). 

Summary information on the potential costs 

of the rule indicated that nonfederal costs 

could range from $92 million to $377 million 

annually. The range of costs was attributed 

to the "uncertainty of manufacturers to 

distribute these costs over the general 

consumer population." 

(No mention of UMRA)

R39 Adjustment of Status 

Under Legal 

Immigration Family 

Equity (LIFE) Act 

Legalization 

Provisions and LIFE 

Act Amendments 

Family Unity 

Provisions

(June 1, 2001)

DOJ Established procedures for certain class 

action participants to become lawful 

permanent residents of the United States.

Fees were required of applicants, with an 

expected impact on the economy, directly 

associated with the expected increase in 

the number of applications and an increase 

in fees, of approximately $152.4 million in 

2001.

“This rule will not result in the 

expenditure by State, local and tribal 

governments, in the aggregate, or by 

the private sector, of $100 million or 

more in any 1 year, and it will not 

significantly or uniquely effect [sic] small 

governments. Therefore, no actions 

were deemed necessary under the 

provisions of the Unfunded Mandates 

Reform Act of 1995.”

(Continued From Previous Page)

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA
Appendix V

Examples of Final Rules that Did Not Trigger 

UMRA But Had Potentially Significant 

Financial Effects on Nonfederal Parties

Page 85 GAO-04-637 Unfunded Mandates

R44 Assessment and 

Collection of 

Regulatory Fees for 

Fiscal Year 2001

(July 11, 2001)

FCC Revised FCC's regulatory fee schedule.

For fiscal year 2001, the amount to be 

recovered through fees was $200,146,000.

(No mention of UMRA, but, as an 

independent regulatory agency, not 

subject to UMRA)

R60 Medicare Program; 

Monthly Actuarial 

Rates and Monthly 

Supplementary 

Medical Insurance 

Premium Rate 

Beginning January 1, 

2002

(Oct. 26, 2001)

HHS Announced the monthly actuarial rates for 

aged and disabled enrollees in the 

Medicare Supplementary Medical 

Insurance (SMI) program for 2002 and the 

monthly SMI premium rate to be paid by all 

enrollees in 2002.

Increased premium costs to beneficiaries 

by about $1.83 billion for 2002.

(No mention of UMRA)

R61 Medicare Program; 

Inpatient Hospital 

Deductible and 

Hospital and 

Extended Care 

Services Coinsurance 

Amounts for 2002

(Oct. 26, 2001)

HHS Announced the inpatient hospital 

deductible and the hospital and extended 

care services coinsurance amounts for 

calendar year 2002 under Medicare Part A. 

The agency estimated that the total 

increased cost to beneficiaries for the 

deductible and coinsurance amounts would 

be about $430 million.

“This notice has no consequential effect 

on State, local, or tribal governments or 

on the private sector.”

R67 Copayments for 

Medications

(Dec. 6, 2001)

VA Amended VA’s medical regulations to set 

forth copayment requirements for 

medications.

Raised the copayment amount for 

medications from $2 to $7, with an 

estimated total impact of an increase in VA 

collections from veterans of $250 million 

annually. 

“This rule would have no consequential 

effect on State, local, or tribal 

governments.”

(Continued From Previous Page)

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA
Appendix V

Examples of Final Rules that Did Not Trigger 

UMRA But Had Potentially Significant 

Financial Effects on Nonfederal Parties

Page 86 GAO-04-637 Unfunded Mandates

R70 Adjustment of Certain 

Fees of the 

Immigration 

Examinations Fee 

Account

(Dec. 21, 2001)

DOJ Adjusted (increased) the fee schedule for 

certain immigration and naturalization 

applications and fees, as well as the fee for 

fingerprinting of applicants who apply for 

certain immigration and naturalization 

benefits. 

The agency anticipated collecting an 

additional $127 million in fees from 

individuals and businesses filing 

immigration applications and petitions in 

fiscal year 2002. The agency also stated 

that the rule would have an effect on the 

economy of $169 million, in order to 

generate the revenue necessary to fund the 

increased expenses of processing the 

Service’s immigration and naturalization 

applications and petitions.

“This rule will not impose a mandate of 

enforceable duty on State, local, and 

tribal governments in the aggregate, or 

on the private sector, and it will not 

significantly or uniquely affect small 

governments. Accordingly, no further 

actions are necessary under the 

provisions of the Unfunded Mandates 

Reform Act of 1995.”

R73 Medicaid Program; 

Modification of the 

Medicaid Upper 

Payment 

Limit for Non-State 

Government-Owned 

or Operated Hospitals

(Jan. 18, 2002)

HHS Modified the Medicaid upper payment limit 

(UPL) provisions to remove the 150-

percent UPL for inpatient hospital services 

and outpatient hospital services furnished 

by nonstate government-owned or 

operated hospitals.

The limits on aggregate federal payments 

to a group of hospitals were estimated to 

reduce potential federal costs by about $9 

billion over fiscal years 2002 through 2006.

“Because this final rule does not 

mandate any new spending 

requirements or costs, but rather limits 

aggregate payments to a group of 

hospitals, we do not believe it has any 

unfunded mandate implications.”

R76 Aviation Security 

Infrastructure Fees

(Feb. 20, 2002)

DOT Imposed a fee (the Aviation Security 

Infrastructure Fee) on air carriers and 

foreign air carriers engaged in air 

transportation, foreign air transportation, 

and intrastate air transportation. 

The agency noted that this rulemaking 

"may impose significant costs on air 

carriers and foreign air carriers."

“The requirements of Title II of the 

Unfunded Mandates Reform Act of 1995 

do not apply when rulemaking actions 

are taken without the issuance of a 

notice of proposed rulemaking. 

Accordingly, the TSA [Transportation 

Security Administration] has not 

prepared a statement under the Act.”

R77 Civil Aviation Security 

Rules

(Feb. 22, 2002)

DOT Required additional qualifications, training, 

and testing of individuals who screen 

people and property carried in passenger 

aircraft.

Although the agency did not complete an 

economic analysis for this rule, it 

recognized that "this rule may impose 

significant costs on aircraft operators and 

foreign air carriers." 

“The requirements of Title II of the 

Unfunded Mandates Reform Act of 1995 

do not apply when rulemaking actions 

are taken without the issuance of a 

notice of proposed rulemaking. 

Therefore, the FAA [Federal Aviation 

Administration] and TSA have not 

prepared a statement under the Act.”

(Continued From Previous Page)

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA
Appendix V

Examples of Final Rules that Did Not Trigger 

UMRA But Had Potentially Significant 

Financial Effects on Nonfederal Parties

Page 87 GAO-04-637 Unfunded Mandates

R78 Security Programs for 

Aircraft 12,500 

Pounds or More

(Feb. 22, 2002)

DOT Required certain aircraft operators using 

aircraft with a maximum certified takeoff 

weight of 12,500 pounds or more to carry 

out security measures, conduct criminal 

history records checks on their flight crew 

members, and restrict access to the flight 

deck. 

Although the agency did not complete an 

economic analysis for this rule, it 

recognized that "this rule may impose 

significant costs on aircraft operators."

“The requirements of Title II of the 

Unfunded Mandates Reform Act of 1995 

do not apply when rulemaking actions 

are taken without the issuance of a 

notice of proposed rulemaking. 

Accordingly, TSA has not prepared a 

statement under the Act.”

R89 Adjustment of Status 

Under Legal 

Immigration Family 

Equity (LIFE) Act 

Legalization 

Provisions and LIFE 

Act Amendments 

Family Unity 

Provisions

(June 4, 2002)

DOJ Final adoption of procedures for certain 

class action participants to become lawful 

permanent residents of the United States.

Fees were required of applicants, with an 

expected impact on the economy, directly 

associated with the expected increase in 

the number of applications and an increase 

in fees of about $43.3 million in 2001, 

$152.2 million in 2002, and $37.9 million in 

2003.

“This rule will not result in the 

expenditure by State, local, and tribal 

governments, in the aggregate, or by 

the private sector, of $100 million or 

more in any one year, and it will not 

significantly or uniquely effect [sic] small 

governments. Therefore, no actions 

were deemed necessary under the 

provisions of the Unfunded Mandates 

Reform Act of 1995.”

R90 TRICARE; Sub-Acute 

Care Program; 

Uniform Skilled 

Nursing Facility 

Benefit; Home Health 

Care Benefit; 

Adopting Medicare 

Payment Methods for 

Skilled Nursing 

Facilities and Home 

Health Care Providers

(June 13, 2002)

DOD Established a sub-acute care benefits 

program with skilled nursing facility and 

home health care benefits modeled after 

those of the Medicare program and 

implemented other reforms enacted in the 

National Defense Authorization Act for 

Fiscal Year 2002.

The rule was expected to result in reduced 

federal TRICARE payments to skilled 

nursing facilities in excess of $100 million 

per year, partially offset by increases in 

Medicare payments to skilled nursing 

facilities, home health agencies, and other 

institutional providers of $4 million in fiscal 

year 2003.

(No mention of UMRA)

(Continued From Previous Page)

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA
Appendix V

Examples of Final Rules that Did Not Trigger 

UMRA But Had Potentially Significant 

Financial Effects on Nonfederal Parties

Page 88 GAO-04-637 Unfunded Mandates

R91 Medicaid Program; 

Medicaid Managed 

Care: New Provisions

(June 14, 2002)

HHS Amended Medicaid regulations to 

implement provisions of the Balanced 

Budget Act of 1997 that allow states 

greater flexibility to amend their state plans 

regarding managed care, established some 

new beneficiary protections, and eliminated 

certain requirements viewed by state 

agencies as impediments to the growth of 

managed care programs.

The agency recognized that "a large 

number of entities, such as hospitals, State 

agencies, MCOs, PIHPs, PAHPs, and 

PCCMs will be affected by the 

implementation of these statutory 

provisions, and a substantial number of 

these entities may be required to make 

changes in their operations..." The agency 

discussed potential impacts on states and 

providers in 12 different areas, projecting 

that some of the changes (such as new 

quality standards and a 6-month 

guaranteed eligibility option) could result in 

costs to providers or states of $125 million 

or more in fiscal years 2004 and 2005.

“We have determined that this final rule 

does not impose any mandates on 

State, local, or tribal governments, or 

the private sector that will result in an 

annual expenditure of $110 million or 

more.”

R93 Revision of Fee 

Schedules; Fee 

Recovery for FY 2002

(June 24, 2002)

NRC Amended the NRC's licensing, inspection, 

and annual fees charged to applicants and 

licensees. 

The final rule resulted in increases in the 

annual fees charged to certain licensees 

and holders of certificates, registrations, 

and approvals, and decreases in annual 

fees for others. For fiscal year 2002, NRC's 

fee recovery amount was to be 

approximately $479.5 million.

(No mention of UMRA, but, as an 

independent regulatory agency, not 

subject to UMRA)

R96 Assessment and 

Collection of 

Regulatory Fees For 

Fiscal Year 2002

(July 12, 2002)

FCC Revised FCC's regulatory fees for fiscal 

year 2002. 

The expected total amount of fees was 

$218,757,000. 

(No mention of UMRA, but, as an 

independent regulatory agency, not 

subject to UMRA)

(Continued From Previous Page)

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA
Appendix V

Examples of Final Rules that Did Not Trigger 

UMRA But Had Potentially Significant 

Financial Effects on Nonfederal Parties

Page 89 GAO-04-637 Unfunded Mandates

R97 Medicare Program; 

Prospective Payment 

System and 

Consolidated Billing 

for Skilled Nursing 

Facilities—Update; 

Notice

(July 31, 2002)

HHS Updated the payment rates used under the 

prospective payment system (PPS) for 

skilled nursing facilities (SNFs) for fiscal 

year 2003, as required by statute.

The updating of rates was projected to 

increase payments to SNFs by 

approximately $400 million, but the agency 

also identified an estimated aggregate 

decrease in payments associated with this 

notice of $1 billion for fiscal year 2003 

because of the expiration of previous 

temporary add-ons to the prospective 

payment rates to SNFs.

“This notice will have no consequential 

effect on State, local, or tribal 

governments. We believe the private 

sector cost of this notice falls below 

these thresholds [$110 million or more] 

as well. Because this notice does not 

impose unfunded mandates, as defined 

by section 202 of UMRA, we have not 

prepared an assessment.”

R107 Acceleration of 

Periodic Report Filing 

Dates and Disclosure 

Concerning Web Site 

Access to Reports

(Sept. 16, 2002)

SEC Accelerated filing deadlines for annual and 

quarterly reports and included 

requirements for additional reporting and 

disclosure.

The amendments accelerating quarterly 

and annual report due dates were 

estimated to increase costs to some 

affected reporting companies—including 

costs for preparing the reports, using 

additional in-house and outside resources, 

and making additional capital investments, 

such as in information systems. SEC 

provided cost ranges and median 

estimates regarding initial costs (from 

about $29.9 million to $11.9 billion—

median value of $298.6 million) and ongoing annual costs (from $75.5 million to 

$686.8 million—median value of $247.2 

million) of accelerating reporting deadlines, 

but noted that these estimates might 

overstate the actual costs from the 

amendments being adopted in this final 

rule. The final rule's amendments 

regarding Web-site access to information 

were estimated to increase the costs to 

affected companies by a total of $463,525.

(No mention of UMRA, but, as an 

independent regulatory agency, not 

subject to UMRA)

(Continued From Previous Page)

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA
Appendix V

Examples of Final Rules that Did Not Trigger 

UMRA But Had Potentially Significant 

Financial Effects on Nonfederal Parties

Page 90 GAO-04-637 Unfunded Mandates

Source: GAO.

R115 Medicare Program; 

Monthly Actuarial 

Rates and Monthly 

Supplementary 

Medical Insurance 

Premium Rate 

Beginning January 1, 

2003

(Oct. 21, 2002)

HHS Increased the cost of premiums for 

Medicare's Supplemental Medical 

Insurance (SMI) enrollees.

The agency estimated that the cost of the 

increase in the premium to the 

approximately 38 million SMI enrollees 

would be about $2.161 billion in 2003.

“This notice has no consequential effect 

on State, local, or tribal governments. 

We believe the private sector costs of 

this notice fall below this threshold [$110 

million] as well.”

R116 Medicare Program; 

Inpatient Hospital 

Deductible and 

Hospital and 

Extended Care 

Services Coinsurance 

Amounts for 2003

(Oct. 21, 2002)

HHS Announced inpatient hospital deductible 

and hospital extended care coinsurance 

amounts for services furnished in calendar 

year 2003 under Medicare Part A.

The total increase in cost to beneficiaries, 

due to the increase in deductible and 

coinsurance amounts and the change in 

the number of deductibles and daily 

coinsurance amounts paid, was estimated 

at about $580 million in 2003. 

“This notice has no consequential effect 

on State, local, or tribal governments or 

on the private sector.”

(Continued From Previous Page)

GAO 

ID Rule Agency

Potential costs or negative financial 

effects of the rule on nonfederal parties

Agency’s statement in the Federal 

Register about the applicability of 

UMRA

(450238)
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